TABLE 15.1 Use the Information to Answer Following Question(s)

question 9

Multiple Choice

TABLE 15.1
Use the information to answer following question(s) .
BayArea Designs Inc., located in Northern California, has two international subsidiaries, one located in the Ukraine, the other in Korea. Consider the information below to answer the next several questions.

-Refer to Table 15.1. If BayArea pays out 50% of its earnings from each subsidiary, what are the additional U.S. taxes due on the foreign sourced income from the Ukraine and Korea respectively?

• A) Ukraine = $0; Korea = ($30,000)
• B) Ukraine = $100,000; Korea = $0
• C) Ukraine = $0; Korea = $66,250
• D) none of the above

---

Definitions:

Administrative Expenses

Costs related to the general operation of a business that are not directly linked to production or sales, such as salaries of office staff and utilities.

Cash Disbursements

The payments a company makes during a period, including expenses, debt payments, and purchase of assets.

Manufacturing Overhead

Indirect factory-related costs that are incurred when producing a product, including costs associated with maintenance, utilities, and quality control.

Fixed Selling Expenses

Fixed selling expenses are those costs associated with selling a product that do not change with the level of production or sales, such as salary of sales staff and rent for office space.