_____ For financial reporting purposes, parent companies must provide income taxes on their share of their domestic subsidiaries' current earnings
A) Only if a consolidated income tax return cannot be filed.
B) Only if the current earnings will be invested indefinitely.
C) Only if the current earnings will not be invested indefinitely.
D) Whether the current earnings will or will not be invested indefinitely.
E) Only if realization is expected through dividends.

Question

Quizplus · Accepted Answer

For financial reporting purposes, parent companies are required to provide for income taxes on their share of their domestic subsidiaries' current earnings regardless of whether those earnings will be reinvested indefinitely or not. This is because the earnings of the subsidiaries are considered part of the parent company's taxable income, and thus taxes must be accounted for accordingly.

_____ for Financial Reporting Purposes, Parent Companies Must Provide Income