Cardinal Owned 100% of Bluejay for the Entire Year, and Both

question 6

Multiple Choice

Cardinal owned 100% of Bluejay for the entire year, and both companies use the accrual method of tax accounting.During the year, Bluejay purchased $30,000 of supplies from Cardinal.In addition, Bluejay provided certain accounting services to Cardinal for $10,000.Including these transactions, Cardinal's separate taxable income was $80,000, and Bluejay's separate taxable income was $50,000.What is the group's consolidated taxable income for the year?

• A)$130,000.
• B)$120,000.
• C)$100,000.
• D)$90,000.
• E)None of the above.

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