ParentCo owned 100% of SubCo for the entire year,and both companies use the accrual method of tax accounting.During the year,SubCo purchased $20,000 of supplies from ParentCo.In addition,SubCo provided internal audit services to ParentCo,which were worth $40,000.Including these transactions,ParentCo's separate taxable income was $75,000,and SubCo's separate taxable income was $80,000.What is the group's consolidated taxable income for the year?
A)$215,000.
B)$195,000.
C)$175,000.
D)$155,000.

Question

Quizplus · Accepted Answer

The Answer of ParentCo owned 100% of SubCo for the entire year,and both companies use the accrual method of tax accounting.During the year,SubCo purchased $20,000 of supplies from ParentCo.In addition,SubCo provided internal audit services to ParentCo,which were worth $40,000.Including these transactions,ParentCo's separate taxable income was $75,000,and SubCo's separate taxable income was $80,000.What is the group's consolidated taxable income for the year?
A)$215,000.
B)$195,000.
C)$175,000.
D)$155,000.

ParentCo Owned 100% of SubCo for the Entire Year,and Both