Global Corporation, a U $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$

question 58

Multiple Choice

Global Corporation, a U.S. multinational, began operations this year. Global 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$ $ 700,000
Foreign source income-Country X $\quad$$\quad$ 100,000
Total $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ $ 800,000
Global paid $15,000 income tax to Country X. What is Global's U.S. tax liability if it takes the foreign tax credit?

• A) $153,000
• B) $168,000
• C) $147,000
• D) $238,000

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Definitions:

Interest Revenue

Income earned from investments, loans, or other interest-bearing assets.

Estimated Bad Debts

Anticipated amounts that customers will not pay the company, typically recorded as an expense.

Realizable Value

The estimated amount that could be received from the sale of an asset in a normal transaction between willing parties.

Cash Discount

A reduction in invoice price given by a seller to a buyer in return for early payment, aimed at accelerating cash inflows.