Answer:
Lahdekorpi OY, a Finnish corporation and Three-O Company, a subsidiary incorporated in the United States
Transfer Pricing:
a) The best transfer pricing method in this case is the cost plus method. This gives the transfer price as Cost + 50%.
b) The appropriate transfer price should be $3 ($2 x 1.5).
Explanation:
Transfer pricing arises when controlled entities set prices for exchange of goods and services. When Lahdekorpi OY, a Finnish corporation, sells wooden puzzles to Three-O Company, given their relationship, transfer pricing has arisen. It is the assignment of cost for goods and services exchanged between related parties, like a parent and a subsidiary.
There are many Transfer Pricing methods which entities and the taxing authorities can use to determine the best transfer price. According to the Organisation for Economic Co-operation and Development (OECD) Multinational Entities and tax authorities can use any of these five main transfer pricing methods:
a) Comparable uncontrolled price (CUP) method. The CUP method is grouped by the OECD as a traditional transaction method (as opposed to a transactional profit method)
b) Resale price method
c) Cost plus method
d) Transactional net margin method (TNMM)
e) Transactional profit split method.
Emails Letter and Business Reports
Answer: C $22,100
Explanation: Bank Reconciliation
8/31/10 Bank Balance $21,650
Add:
8/31/10 Deposit in transit. $3,900
Less:
8/31/10 Outstanding Chq. $2,750
8/30/10 Rtd Chq. $600
8/31/10 Bank Charges. $100
Cash book balance $22,100
Answer:
(Decrease, Increase)
Explanation:
When the government formulates and implements policies aimed at increasing equality, the society will experience a reduction in the level of efficiency. For example, an increase in income tax on wealthiest Americans, and redistribution of the tax revenue to the poorest Americans would may discourage the wealthy from taking more income-generating activities which create jobs, this is not optimal. At the same time, this policy would reduces the peoples’ incentive to work hard to earn their own money.
Answer:
The balance in the paid in capital in excess of par will be $478,950.
Explanation:
As 4,210 shares is retired and each shares carries a $5 Paid-in capital in excess of par ( Issued price - Par value = $8 - $3 = $5), the retirement of 4,210 shares will include the clear of 4,210 x 5 = $21,050 in Paid-in capital in excess of par.
The beginning balance of the Paid-in capital in excess of par account = (8 -3) x 100,000 = 300,000
=> The remaining balance of the Paid-in capital in excess of par account = 500,000 - 21,050 = $478,950.
So, the answer is $478,950.
