Pappas Company owns 85 percent of Sunny Company's stock and 80 percent of Sibble Company's stock.All acquisitions were made at book value.The fair values of noncontrolling interests at the time of acquisition were equal to the proportionate share of the book values of the companies.The companies file a consolidated tax return each year and in 20X9 paid a total tax of $112,000.Each company is involved in a number of intercompany inventory transfers each period.Information on the companies' activities for 20X9 is as follows:
Pappas Company does not record income tax expense on income from subsidiaries because a consolidated tax return is filed.
-Based on the information provided,what amount of consolidated net income will be reported for the year 20X9?
A)$168,000
B)$280,000
C)$165,000
D)$250,000

Question

Pappas Company owns 85 percent of Sunny Company's stock and 80 percent of Sibble Company's stock.All acquisitions were made at book value.The fair values of noncontrolling interests at the time of acquisition were equal to the proportionate share of the book values of the companies.The companies file a consolidated tax return each year and in 20X9 paid a total tax of $112,000.Each company is involved in a number of intercompany inventory transfers each period.Information on the companies' activities for 20X9 is as follows:
  Pappas Company does not record income tax expense on income from subsidiaries because a consolidated tax return is filed.
-Based on the information provided,what amount of consolidated net income will be reported for the year 20X9?
A)$168,000 
B)$280,000 
C)$165,000 
D)$250,000

Quizplus · Accepted Answer

The consolidated net income is the total net income of a parent company and its subsidiaries. Without specific financial details provided, it's impossible to calculate or determine the exact amount. However, if this is a question from a specific dataset or example where $168,000 is the correct answer, then it's essential to consider all elements that contribute to consolidated net income, including the parent company's net income, the subsidiaries' net incomes, intercompany transactions, and any minority interests.

Pappas Company Owns 85 Percent of Sunny Company's Stock and 80