_____ Sixx Is an 80%-Owned Domestic Subsidiary of Pixx

Multiple Choice

_____ Sixx is an 80%-owned domestic subsidiary of Pixx. For 2006, Sixx had $250,000 of pretax income and $150,000 of net income. On 12/31/06, Sixx paid a $100,000 dividend. The remaining $50,000 of net income is expected to be invested indefinitely. The tax rate is 40%. For 2006, Pixx should record income taxes relating to Sixx of:

A) $ -0-
B) $7,200
C) $8,000
D) $10,800