Kiwi Corporation Is a 100 Percent Owned Australian Subsidiary of Exotic

question 19

Short Answer

Kiwi Corporation is a 100 percent owned Australian subsidiary of Exotic Fruit Corporation,a U.S.corporation.Kiwi had post-1986 earnings and profits of 1,000,000 Australian dollars (AUD)and post-1986 foreign taxes of $225,000.During the current year,Kiwi paid a dividend of 250,000 AUD to Exotic Fruit.Assume an exchange rate of 1 AUD = $0.75.No withholding tax was imposed on the dividend.What amount of taxable income does the dividend generate on Exotic's U.S.tax return?

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Definitions:

Mass Customization

A production process in which items are produced in large quantities but are customized to fit the desires of each customer.

Make-to-order

A production strategy where products are only manufactured after receiving a customer's order, allowing for customization but potentially increasing lead times.

SCM

Supply Chain Management encompasses monitoring and managing the flow of materials, information, and finances as they transition from suppliers to manufacturers, wholesalers, retailers, and then to the end consumer.

Production

The process of creating, manufacturing, or assembling products or services, often involving raw materials and component parts.