TABLE 14.1 Uses the Information to Answer the Following Question(s)

question 38

Multiple Choice

TABLE 14.1
Uses the information to answer the following question(s) .
MetroCity 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 14.1. If MetroCity 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

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Definitions:

Capital Balances

Capital balances refer to the amount of money equity holders have invested in a company, often reflected in the equity section of the balance sheet.

Net Loss

The amount by which a company's expenses exceed its revenues over a specific period, indicating a negative financial performance.

Share

A unit of ownership interest in a corporation or financial asset, representing an equal proportion of the company's capital.