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SashulF [63]
3 years ago
5

Problem 3-6 (LO. 1) Parent, a domestic corporation, owns 100% of Block, a non-U.S. corporation, and Chip, a domestic corporation

. Parent also owns 45% of Trial, a domestic corporation. Parent receives no distributions from any of these corporations. Assuming Parent consolidates all eligible subsidiaries for Federal income tax purposes, select either "Yes" or "No" to indicate whether the entities' taxable income is included in Parent's current-year Form 1120, U.S. income tax return. a. Chip b. Block c. Trial
Social Studies
1 answer:
Digiron [165]3 years ago
5 0

Answer:

a. Y es

b. N o

c. No

Explanation:

Whenever a corporate group decides to establish new subsidiaries in its home country or in foreign countries, it should consolidate all of these subsidiaries (regardless of where they are located) into a single financial statement (if such statement is intended for accounting purposes). This should be done if Parente has an influence of more than 50% of the voting power of its subsidiaries.

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