TABLE 15.1 Use the Information to Answer Following Question(s)

question 9

Multiple Choice

TABLE 15.1
Use the information to answer following question(s) .
BayArea 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 15.1. If BayArea 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:

Fixed Assets Added

Refers to the purchase or acquisition of physical assets by a company that are expected to be used for longer than one accounting period.

Working Capital Strategy

A business approach focusing on managing a company's operational needs efficiently by balancing current assets and current liabilities to maintain liquidity.

Long-term External Financing

Funding obtained from sources outside the company, typically through issuing equity or long-term debt, intended for periods longer than one year.

Aggressive

An assertive stance or policy in business or investment, typically involving higher risks for the possibility of higher returns.