Pappas Company owns 85 percent of Sunny Company's stock and 80 percent of Sibble Company's stock. All acquisitions were made at book value. The fair values of noncontrolling interests at the time of acquisition were equal to the proportionate share of the book values of the companies. The companies file a consolidated tax return each year and in 20X9 paid a total tax of $112,000. Each company is involved in a number of intercompany inventory transfers each period. Information on the companies' activities for 20X9 is as follows: 20X9 ReportedOperating Income20X8 IntercompanyProfit Realized in 20X920X9 Intercompany ProfitNot Realized in 20X9Pappas Company$155,000 $25,000 $15,000 Sunny Company 35,000 10,000 6,000 Sibble Company 60,000 28,000 12,000 Pappas Company does not
record income tax expense on income from subsidiaries because a consolidated tax return is filed.Based on the information provided, what amount of consolidated net income will be reported for the year 20X9?
A. $165,000
B. $280,000
C. $168,000
D. $250,000
Answer: C
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Answer the following statement true (T) or false (F)
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a. after the formal closing entries have been entered into the journal. b. before the preparation of a formal trial balance. c. after the formal adjusting entries have been entered into the journal. d. before the preparation of formal financial statements.
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