The Subsidiary of a U

question 31

Multiple Choice

The subsidiary of a U.S.corporation located in Country Y generated income of $1,000,000 on which it paid $200,000 in taxes to Country Y.The subsidiary paid a dividend to the U.S.parent of $150,000.How much tax is currently owed to the U.S.government if the federal tax rate is 35%?

• A)$35,625
• B)$28,125
• C)$52,500
• D)$32,500

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Definitions:

Early Years

A term referring to the initial period in the lifecycle of an entity or project, often marked by growth, development, and establishment of fundamentals.

Units-of-production

A depreciation technique that distributes an asset's expense over its lifespan according to the quantity of units manufactured.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against a fixed asset since it was put into use.

Residual Value

The estimated value that an asset will have at the end of its useful life.