Answer:
A. = (15% X $2M) + (21% X $2M) = $720,000. Since there is no mechanism for mitigating double taxation, the branch profit will be taxed on the to tax rate of 15% and 21% which is $300,000 and $420,000.
B. The total tax for $2m branch profit if US corporations can remove foreign based profit from US taxation will be just the 15% x $2m = $300,000.
C.If they are allowed to take deductions for foreign income taxes, the total tax on the $2m branch profit will be (21% -15%) x $2m = $120,000.
Explanation:
D.1. If credit are allowed for foreign income tax paid, total tax will be ($2m - $300,000 been foreign tax paid) x 21% = $357,000
D.2.
If the charge foreign income taxes at 30% and US corporations can claim refundable credit for foreign income tax paid on foreign source income = ($2m - $300,000 been the foreign income tax paid) = $1 700,000 x 30% = $510,000
Answer: $35,000
Explanation:
The payments of $1,033.34 at the end of every month is a constant amount which makes it an annuity.
Present value of annuity:
= Annuity * (1 - (1 + rate) ^-no. of periods) / rate
Rate needs to be made a monthly rate:
= 4%/12
= 4/12%
= 1,033.34 * ( 1 - ( 1 + 4/12%) ⁻³⁶/ 4/12%
= $35,000
Purchase price = Down payment + Present value of annuity
= 4,000 + 35,000
= $39,000
Answer:
$55,500
Explanation:
The computation of the net realizable value after the write off entry is show below:
The credit balance in allowance with terms to bad debts is
= $4,500 - $4,000
= $500
Now the net realizable value is
= ($60,000 - $4,000) - ($4,500 - $4,000)
= $56,000 - $500
= $55,500
Hence, the same is to be considered
Answer:
False
Explanation:
Given that,
Accounts receivable = $30,000
Factoring fee charged = 2%
Therefore,
Factory fee = 2% of Accounts receivable
= 2% × $30,000
= $600
The amount $600 has to be subtracted from the accounts receivable.
Hence, the journal entry is as follows;
Cash A/c ($30,000 - $600) Dr. $29,400
Factory fee Expense A/c Dr. $600
To Accounts Receivable $30,000
(To record the account receivable)
