Olde town inc a us corporation earns 100000 in

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Financial Accounting: The Impact on Decision Makers
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Chapter 10 / Exercise 10-12
Financial Accounting: The Impact on Decision Makers
Norton/Porter
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99.Olde Town, Inc., a U.S. corporation, earns $100,000 in passive foreign-source income and suffers a net loss of$60,000 in the general basket. What is the numerator of Olde Town’s FTC limitation formula for the passive basket in the current year?a. $0b. $40,000c. $60,000d. $100,000ANSWER:bRATIONALE:The $60,000 loss in the general limitation basket is offset against the $100,000 income in the passive basket, resulting in a $40,000 numerator in the FTC calculation.
100. Youngster, Inc., a U.S. corporation, earns $20,000 in passive foreign-source income and suffers a net loss of $60,000 in the general limitation basket. What is the numerator of the FTC limitation formula for Youngster’s passive basket in the current year?
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Financial Accounting: The Impact on Decision Makers
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Chapter 10 / Exercise 10-12
Financial Accounting: The Impact on Decision Makers
Norton/Porter
Expert Verified
Chapter 9: Taxation of International Transactions101. Waldo, Inc., a U.S. corporation, owns 100% of Orion, Ltd., a foreign corporation. Orion earns only general basket income. During the current year, Orion paid Waldo a $5,000 dividend. The foreign tax credit associatedwith this dividend is $3,000. The foreign jurisdiction requires a withholding tax of 10%, so Waldo received only $4,500 in cash as a result of the dividend. What is Waldo’s total U.S. gross income reported as a result of the $4,500 cash received?
102. Performance, Inc., a U.S. corporation, owns 100% of Krumb, Ltd., a foreign corporation. Krumb earns only general basket income. During the current year, Krumb paid Performance a $200,000 dividend. The foreign tax credit associated with this dividend is $30,000. The foreign jurisdiction requires a withholding tax of 30%,so Performance received only $140,000 in cash as a result of the dividend. What is Performance’s total U.S. gross income reported as a result of the $140,000 cash received?

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