(Solution) - Taxable incomes for Pub Corporation and Sew Corporation its 70 -(2025 Original AI-Free Solution)

Paper Details

Taxable incomes for Pub Corporation and Sew Corporation, its 70 percent-owned subsidiary, for
2011 are as follows (in thousands):

ADDITIONAL INFORMATION
1. Pub acquired its interest in Sew at a fair value equal to book value on December 31, 2010.
2. Sew paid dividends of $40,000 in 2011.
3. Pub sold $90,000 in merchandise to Sew during 2011, and there was $10,000 in unrealized profit from the sales at year end.
4. A flat 34% income tax rate is applicable.
5. Pub is eligible for the 80% dividends-received deduction.
REQUIRED:
Prepare a consolidation income statement workpaper for Pub Corporation and Subsidiary for 2011.