Ask Question
BusinessBusiness
23 June, 04:16

Coop Inc. owns 40% of Chicken Inc., both Coop and Chicken are corporations. Chicken pays Coop a dividend of $10,000 in the current year. Chicken also reports financial accounting earnings of $20,000 for that year. Assume Coop follows the general rule of accounting for investment in Chicken. What is the amount and nature of the book-tax difference to Coop associated with the dividend distribution (ignoring the dividends received deduction) ?

+5
Answers (1)
  1. 23 June, 06:49
    0
    The dividend for income tax is greater than the income as per the books, the difference is unfavourable and is $ 2000.

    Explanation:

    Coop inc. must take into consideration $ 10000 dividend for tax purposes.

    on the books, the income is = $20000*40%

    = $ 8000

    the difference = $ 10000 - $ 8000

    = $ 2000

    clearly, the dividend for income tax is greater than the income as per the books, the difference is unfavourable and is $ 2000.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Coop Inc. owns 40% of Chicken Inc., both Coop and Chicken are corporations. Chicken pays Coop a dividend of $10,000 in the current year. ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
GCSS-Army has the ability to track a piece of equipment through the lifecycle of the dispatch. Which report needs to be accessed to identify the equipment as either ""In Use (Dispatched) "" or when it is ""Available"" and able to be dispatched?
Answers (1)
While developing an eco-friendly cleaning wipe, Jackie suggested using a particular material, which triggered an idea in Jamal to try a similar but faster-dissolving material. The team adopted Jamal's idea, and the product succeeded.
Answers (1)
At the beginning of the year, accounts receivable were $158,000 and the allowance for bad debts was $12,900.
Answers (1)
Carla Vista Co. had these transactions during the current period. June 12 Issued 83,000 shares of $1 par value common stock for cash of $311,250. July 11 Issued 4,300 shares of $103 par value preferred stock for cash at $107 per share. Nov.
Answers (1)
Elkland Heating & Cooling installs and services commercial heating and cooling systems. Elkland uses job costing to calculate the cost of its jobs. Overhead is allocated to each job based on the number of direct labor hours spent on that job.
Answers (1)
New Questions in Business
Following are transactions of Gotebo Tanners, Inc., a new company, during the month of January: Issued 10,000 shares of common stock for $15,000 cash. Purchased land for $12,000, signing a note payable for the full amount.
Answers (1)
If the selling price per unit is $42, the unit contribution margin is $15, and total fixed expenses are $570,000, what will the breakeven sales in units be? Group of answer choices 13,571 38,000 8,550,000 21,111
Answers (1)
Here I Sit Sofas has 7,400 shares of common stock outstanding at a price of $97 per share. There are 720 bonds that mature in 33 years with a coupon rate of 7.1 percent paid semiannually.
Answers (1)
Workers (one per station) get paid 10 euros per hour, and this type of salad is always in high demand (assume unlimited demand). Ignore any idle time of workers resulting from the beginning or the end of the day.
Answers (1)
Does it cost money to enter into the warm springs?
Answers (2)
Home » Business » Coop Inc. owns 40% of Chicken Inc., both Coop and Chicken are corporations. Chicken pays Coop a dividend of $10,000 in the current year. Chicken also reports financial accounting earnings of $20,000 for that year.
Sign Up Forgot Password?