In Keeping with Internal Revenue Code,Clarence Company Transfers Goods to Marguerite

question 19

Multiple Choice

In keeping with Internal Revenue Code,Clarence Company transfers goods to Marguerite Corporation,its foreign subsidiary,at the price Marguerite will sell the product to its customers,less the industry's average gross profit margin of 30%. What method of transfer pricing is Clarence using?

• A)cost-plus method
• B)comparable uncontrolled price method
• C)comparable profits method
• D)resale price method

---

Definitions:

Orangutans

Large apes native to Indonesia and Malaysia, known for their red-brown hair and highly intelligent, solitary behavior.

Placenta

The partly fetal and partly maternal organ whereby materials are exchanged between fetus and mother in the uterus of placental mammals.

Embryo/Fetus

The stage of development in vertebrates from fertilization until birth, beginning as an embryo and later developing into a fetus.

Hominoids

A group of primates that includes great apes and humans, characterized by their larger brain sizes, lack of tail, and more complex behaviors compared to other primates.