For Each of the Following Situations, Select the Best Answer

question 31

Short Answer

For each of the following situations, select the best answer concerning accounting for income taxes in combinations:(A) May file a consolidated income tax return.(B) May not a file consolidated income tax return.(C) Must file a consolidated income tax return.Parent company owns 85% of the voting stock of the subsidiary, and there are significant intra-entity transfers.Subsidiary is a foreign corporation.Parent company owns 90% of the voting stock of the subsidiary, but there are no intra-entity transfers of inventory.Parent company owns 75% of the voting stock of the subsidiary but there are no intra-entity transfers of inventory.Parent company owns 90% of the voting stock of the subsidiary, and there are intra-entity transfers of inventory.Parent company owns 75% of the voting stock of the subsidiary and there are intra-entity transfers of inventory.

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Definitions:

Service Sector

The segment of the economy that provides intangible goods and services, such as healthcare, education, and financial services.

Trading Nation

A country whose economy is highly engaged in international trade, evidenced by a high ratio of exports and imports to its gross domestic product.

Trade Deficit

A situation where a country's imports of goods and services exceed its exports, leading to a net outflow of domestic currency to foreign markets.

Remained

Stayed in the same place or condition; continued to be.