SunCo, a U

question 87

Multiple Choice

SunCo, a U.S. corporation, owns a number of patents related to designing sunglasses. SunCo licenses these patents to unrelated parties. SpainCo, a Spanish corporation, paid SunCo $78,000 in royalties related to these licenses. SpainCo uses the patent information in its manufacturing process in its Texas plant. WiscCo, a domestic corporation, paid SunCo $32,000 in royalties related to the licenses. WiscCo uses the patent information in its manufacturing process in its Germany manufacturing plant. How much U.S.-source royalty income did SunCo earn from these licenses?

• A) $0
• B) $32,000
• C) $78,000
• D) $110,000

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Definitions:

Investing Activities

These are transactions related to the acquisition or sale of long-term assets and other investments not included in cash equivalents.

Note Payable

A written promise to pay a specific amount of money, usually with interest, by a certain date.

Financing Activities

These refer to transactions and business events involving the flow of cash between a company and its investors, creditors, and owners, such as issuing shares, borrowing loans, and paying dividends.

Accounts Receivable Balance

The total amount of money due to a company for goods or services delivered or used but not yet paid for by customers.