ParentCo and SubCo recorded the following items of income and deduction for the current tax year. Compute ParentCo and SubCo's taxable income or loss computed on a separate basis.
ParentCo SubCo

Question

ParentCo and SubCo recorded the following items of income and deduction for the current tax year.  Compute ParentCo and SubCo's taxable income or loss computed on a separate basis.
ParentCo SubCo

Quizplus · Accepted Answer

To compute taxable income on a separate basis, each company's income and deductions must be calculated individually. The taxable income for ParentCo is $82,800 (Option D and E) and the taxable income for SubCo is $33,000 (Options B, C, and E). The best choice is E because it is the only option where both ParentCo and SubCo's taxable income matches with the given numbers.

ParentCo and SubCo Recorded the Following Items of Income and Deduction