What Effect Will the Elimination of the Unrealized Intercompany Gain

question 1

Multiple Choice

What effect will the elimination of the unrealized intercompany gain (in the preparation of the consolidated income statement) have on consolidated income tax expense for 2015?

• A) It will have no effect.
• B) It will reduce income tax expense by $24,000.
• C) It will reduce income tax expense by $18,000.
• D)It will increase income tax expense by $24,000.

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Definitions:

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The method through which living beings decipher and structure sensory information to create a significant perception of their surroundings.

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Goods or services that are considered non-essential but desirable and are often associated with high quality and a high price.

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Essential needs required for basic human survival and well-being, such as food, water, and shelter.

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