Obispo, Inc

question 27

Essay

Obispo, Inc., a U.S. corporation, received the following sources of income:
$20,000 interest income from a loan to its 100 percent owned U.S. subsidiary.
$30,000 dividend income from its 5 percent owned Canadian subsidiary.
$50,000 royalty income from its Irish subsidiary for use of a trademark within the United States.
$40,000 rent income from its Dutch subsidiary for use of a warehouse located in Belgium.
$3,000 capital gain from sale of stock in its 40 percent owned Mexican joint venture. Title passed in the United States.
What amount of foreign source income does Obispo have?

---

Definitions:

Productive Efficiency

A situation where an economy or entity cannot produce more of one good without affecting the production of another good, utilizing all resources optimally.

Purely Competitive

A market structure characterized by a large number of sellers offering identical products, where no single seller can influence the market price.

Least-Cost Rate

An economic principle that emphasizes minimizing production or operation costs while achieving a specific output level.

Average Total Cost

The total cost of production divided by the total quantity produced, indicating the cost per unit of output.