P and S Comprise an Affiliated Group That Filed Consolidated

question 58

Multiple Choice

P and S comprise an affiliated group that filed consolidated returns in 2018, 2019 and 2020. They report the following for 2018, 2019 and 2020. $\begin{array}{|l|l|l|l|} \hline & 2018 & 2019 & 2020 \\\hline \text { Parent } & 100 & 200 & 200 \\\hline \text { Subsidiary } & (500) & 100 & 100\\\hline \end{array}$ How much of the Subsidiary 2018 loss can be utilized against consolidated net income in 2019?

• A) $300
• B) $400
• C) $240
• D) $80

---

Definitions:

Assets

Resources owned or controlled by a person or company, expected to bring future economic benefits.

Credits

Accounting entries that increase liabilities or equity on the balance sheet, or decrease an asset or expense account on the income statement.

Dividends Accounts

Dividends Accounts represent the financial accounts used by a company to record the dividends paid out to shareholders, reflecting the distribution of earnings.

Liabilities

Liabilities are financial obligations or debts that a company owes to others, which must be settled over time through the transfer of money, goods, or services.