ParentCo Owned 100% of SubCo for the Entire Year

question 125

Multiple Choice

ParentCo owned 100% of SubCo for the entire year. ParentCo uses the accrual method of tax accounting whereas SubCo uses the cash method. During the year, SubCo sold raw materials to ParentCo for $35,000 under a contract that requires no payment to SubCo until the following year. Exclusive of this transaction, ParentCo had income for the year of $30,000, and SubCo had income of $50,000. The group's consolidated taxable income for the year was:

• A) $165,000.
• B) $150,000.
• C) $115,000.
• D) $80,000.

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Definitions:

Controller Scope Tag

A label or identifier used in a control system or PLC program to uniquely identify and access a variable's value within a specific context or scope.

Base Tag

In programming, a foundational identifier used for referring to or interacting with an underlying data structure or element.

Alias Tag

A secondary or alternative identifier used in programming and information systems to refer to the same data or resource as the primary tag or address.

Alias Tag

A reference or name assigned to a data point or variable in a control system that can be used interchangeably with its original name for easier identification or programming.