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VashaNatasha [74]
3 years ago
13

Ketchem Corp., a cash basis taxpayer, and Catcham Corp., an accrual basis taxpayer, are parent-subsidiary corporations. In Janua

ry-November of year 1, Ketchem sold $50,000 of supplies to Catcham, which Catcham paid for on a 1/20 net 30 basis, always paying on Day 20. On December 27 of year 1, Ketchem 's December sale of supplies to Catcham, Ketchem 's taxable income is $600,000 and Catcham's is $120,000. How much taxable income should Ketchem and Catcham report on the year 1 consolidated tax return?
a. $720,000
b. $770,000
c. $74,000
d. $710,000
Business
1 answer:
Softa [21]3 years ago
7 0

Answer: B. $770,000

Explanation:

The taxable income that they would report on the consolidate tax return would be $770,000 ($600,000 + $120,000 + $50,000)

The reason why we have added $50,000 is because the Ketchem sold $50,000 worth of supplies to Catcham and Catcham were able to pay that amount within 20 days. That is in the month of November.

Also, the consolidated report is to be made after December 27, therefore, we will include this transaction as it was before 27th December.

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Using the same amount of time and resources, Tomer can either write 100100100 lines of code or process 202020 reports, and Charl
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3 years ago
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Morgan Pharmaceutical spends $50,000 this year in research and development for a new drug to cure liver damage. By the end of th
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Answer:

The impact of spending $50,000 on the research and development for a new drug to to cure liver damage will increase the expenses of the Morgan Pharmaceutical in the years financial statements.

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Morgan pharmaceutical is pending $50,000 on he research and development of new drug which can cure the liver damage, from this spending company is expecting that after they have successfully created new drug it will lead to the increase in sales , which will ultimately lead to increase in profits , which then would totally recover the initial cost incurred on research and development but until then these expenses would be shown in the current years financial statement as expenses, and thus would increase the total expenses of the company.

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