ParentCo and SubCo are calendar year corporations that keep their respective books on the accrual basis.

ParentCo and SubCo are calendar year corporations that keep their respective books on the accrual basis. The companies have taxable income of $200,000 and $250,000, respectively, for tax year 2013 (before consolidation adjustments, elimination entries and charitable deductions). The following transactions are included:Land was sold by ParentCo to a third party for $100,000. The land was acquired from SubCo in 2011. SubCo acquired the land in 2008 for $50,000.ParentCo’s taxable income includes a $12,000 dividend SubCo paid to ParentCo.ParentCo lends SubCo $150,000 in January 2013. SubCo repaid the loan with $6,000 interest in December 2013.ParentCo and SubCo contribute $17,000 and $11,000 to charity, respectively.SubCo earned $1,600 of tax exempt interest income which is not included in SubCo’s $250,000 taxable income.Directions: Calculate the consolidated taxable income and consolidated tax liability of ParentCo and SubCo for 2013. Than calculate the basis of ParentCo’s stock at the end of 2013, assuming that it was $1,000,000 at the beginning of the year.Requirements:Clearly identify the requirements being addressed. Show all calculations within the cells of an Excel spreadsheet. This means that you must use formulas and links so that your thought process can be examined. Make good use of comments to convey your thought process as well. No hard coding of solutions. Submit a single Excel file for grading. Review the grading rubric, which can be accessed from the Course Information page, to understand how you will be graded on this assignment. Reach out to your instructor if you have questions about the assignment.

ParticularsCompanies Taxable IncomeAdjustment of profit on land recorded earlier by sub coDividend received by parent company will be reduced as it is already been reflected in the taxable...