Ponte Corporation Owns 25 Percent of the Voting Shares of Scala

question 52

Multiple Choice

Ponte Corporation owns 25 percent of the voting shares of Scala Corporation.In 20X8,Scala reported net income of $120,000 and paid dividends of $30,000.Ponte uses the equity method to account for this investment.Ponte reported taxable income of $160,000 on its separate operations and has an effective tax rate of 40 percent.There is an 80 percent exemption on intercompany dividends.
-Based on the preceding information,income taxes payable for Ponte for the year 20X8 will be:

• A)$67,000
• B)$64,600
• C)$64,000
• D)$76,000

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Definitions:

Individualism-Collectivism Dimension

A cultural framework that describes the degree to which individuals in a society are integrated into groups, highlighting the contrast between personal independence and communal interdependence.

Intercultural Competency

the ability to communicate effectively and appropriately with people of other cultures, understanding cultural differences and similarities.

Time Orientation Dimension

A cultural characteristic that reflects the extent to which a society values past, present, or future outcomes and behaviors.

Multinational Corporations

Companies that operate in multiple countries, managing production or delivering services in more than one country.