Instruction 21.1: Use the Information to Answer Following Question(s)

question 6

Multiple Choice

Instruction 21.1:
Use the information to answer following question(s) .
Rogue River Exporters USA has $100,000 of before tax foreign income. The host country has a corporate income tax rate of 25% and the U.S. has a corporate income tax rate of 35%.
-Refer to Instruction 21.1. If the U.S. treated the taxes paid on income earned in the host country as a tax-deductible expense, then Rogue River's total U.S. corporate tax on the foreign earnings would be ________.

• A) $10,000
• B) $26,250
• C) $35,000
• D) $51,250

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Definitions:

Marked Down

A reduction in the original selling price of goods, often to clear old stock or boost sales.

Clearance Sale

A sale event to clear out inventory, often featuring significant reductions in prices to encourage quick sales.

Cost Price

The total cost incurred to produce or purchase an item before any markup or selling expenses are added.

Operating Expense

Expenditures that a business incurs through its normal business operations.