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

---

Definitions:

Governmental Fund Types

Types of funds used by governmental entities to account for their financial resources, including general, special revenue, debt service, capital projects, and permanent funds.

Modified Approach

Modified Approach is a method in governmental accounting allowing certain assets to be reported at historical cost, exempt from the regular depreciation accounting if they are maintained at predefined condition levels.

Infrastructure Assets

Long-term physical assets that are critical for providing public services, including roads, bridges, and water supply systems.

Maintenance Costs

Expenses incurred to keep an asset in working order or restore it to proper condition; does not improve upon the original asset.