Jovar Inc, a U $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$

question 72

Multiple Choice

Jovar Inc., a U.S. multinational, began operations this year. Jovar had pretax U.S. source income and foreign source income as follows.
Corporate tax rate schedule.
U.S. source income $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ $ 600,000
Foreign source income-Country O $\quad$$\quad$$\quad$ 100,000
Total $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ $ 700,000
Jovar paid $50,000 income tax to Country O. Compute Jovar's U.S. tax liability if it takes the foreign tax credit.

• A) $204,000
• B) $97,000
• C) $126,000
• D) $147,000