Answer:
Instructions are listed below.
Explanation:
Giving the following information:
Pear, Inc. generates a $100,000 net operating loss in the current year. Plum, Inc. generates $500,000 of taxable income.
If the company files a consolidated tax return, the gain and losses of both companies are combine on a single return.
Consolidated tax return:
Income= 500,000 - 100,000= 400,000
Assuming a tax of 35%
Tax= 400,000*0.35= $140,000
Without a consolidated:
Plum Inc= $500,000
Pear Inc= $100,000 loss
Plum Inc:
Tax= 500,000*0.35= $175,000
