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Paha777 [63]
3 years ago
7

Zenon Inc. has the following taxable income: U.S. source income $ 1,900,000 Foreign source income 240,000 Taxable income $ 2,140

,000 Zenon paid $33,000 foreign income tax. Compute its U.S. income tax, assuming the foreign source income does not qualify as FDII.
Business
1 answer:
Colt1911 [192]3 years ago
5 0

Answer:

The income tax is $81,600

Explanation:

In this question, we are asked to compute the foreign tax income for Zenon Inc assuming the foreign source income does not qualify as FDII

To compute this, we employ a mathematical approach.

Mathematically,

The income paid by Zenon Inc = Foreign credit Tax limitation * Foreign source income/taxable income

We identify the parameters in the equation as follows;

Foreign tax limitation = Taxable income * tax rate

Where the tax rate for the US is 34% or simply 0.34

Foreign tax limitation = 0.34 * 2,140,000 = $727,600

Foreign source income = $240,000

Taxable income = $2,140,000

Income paid = 727,600 * 240,000/2,140,000 = $81,600

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Sue invested $12,000 in the ABC Limited Partnership and received a 10 percent interest in the partnership. The partnership had $
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Answer:

Option (B) is correct.

Explanation:

Invested amount = $12,000

Interest received in partnership = 10%

qualified non-recourse debt in partnership = $34,000

Loss allowed = $15,400 (At risk amount)

Tax basis = $18,800

Disallowed loss = Loss allocation - Risk amount

                          = $18,800 - $15,400

                            = $ 3,400

4 0
3 years ago
Cassy Budd Company has a defined benefit pension plan. At the end of the reporting year, the following data were available: begi
kozerog [31]

Answer:

Credit to the PBO for $13,500

Explanation:

Defined benefit pension plan is a pension structure adopted by a company in which an employee is guaranteed payments in the future for example after retirement. Since the payments are given far into the future, complex calculations are required to compute how to account for annual expenses and changes in pension obligation.

Now, under the above plan, the amount of the future benefits that will be paid for by the company depends on a multitude of factors such length of time served, an employee lifespan. The annual expense needs to match the recognition of the related expense in the period in which the particular employee renders the service for which they will be paid in the future.

So, the formula for Periodic (Annual) Pension Expense is Interest Costs (Interest incurred on the beginning Projected Benefit Obligation) + Service Costs (Present Value of the projected retirement benefits earned in the current period) - Actual Return on Plan Assets (the returns provided by the assets held under the Company's pension plan) + Amortization of Prior Service Costs (changes to pension expense as a retroactive amendments to the pension plan) +/- Amortization of Actuarial Gains or Losses (the change in the PBO as a result of changes in assumptions used to calculate the PBO).

The question provides us with the interest costs, the services costs, and the expected return on plan assets with other costs being nil.

Therefore, annual pension expense is Service Costs + Interest Costs - Expected Return on Plan Assets = 18,500 + 5,500 - 10,500 = 13,500.

The journal entry is a credit to the PBO of the amount of the expense and a debit to the Pension Expense. Note that the difference between ending PBO and beginning PBO is NOT equivalent to annual expense since other items such as company's contribution and changes in fair value of the liability also impact the PBO.

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3 years ago
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Which statement describes an advantage of buying a home?
Vedmedyk [2.9K]

your taxes increase

Explanation:

mark me brainliest pl

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4 0
3 years ago
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Bluestone Company had three intangible assets at the end of the current year:
ra1l [238]

Answer:

Bluestone Company

a. The acquisition cost of each intangible asset:

a. Patent $3,600

b. Trademark $8,000

c. Licensing Rights $90,000

b. The amortization of each intangible asset for the current year ended December 31:

a. Patent $3,600/12 = $300

b. Trademark $8,000 indefinite life $0

c. Licensing Rights $90,000/6 = $15,000

c. Balance Sheet as of December 31, of the current year:

Intangible Asset:

a. Patent                     $3,600

b. Trademark               8,000

c. Licensing Rights   90,000

Total Intangible      $101,600

less amortization       15,300

Net book value      $86,300

Income Statement for the year ended December 31 of the current year.

Amortization Expenses:

a. Patent                      $300

c. Licensing Rights $15,000

Explanation:

a) Data and Analysis:

a. Patent $3,600 Cash $3,600

b. Trademark $8,000 Cash $8,000

c. Licensing Rights $90,000 Cash $90,000

a. Acquisition cost of each intangible asset:

a. Patent $3,600

b. Trademark $8,000

c. Licensing Rights $90,000

b. Amortization of each intangible asset:

a. Patent $3,600/12 = $300

b. Trademark $8,000 indefinite life $0

c. Licensing Rights $90,000/6 = $15,000

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