5 poin eBay Corruption ( a U.S taxpayer ) has wholly owned subsidiaries located in Hungary and...
Question:
5 poin eBay Corruption ( a U.S taxpayer ) has wholly owned subsidiaries located in Hungary and Hong Kong . The Hungarian operation purchases electric generators manufactured by eBay Co. and sells them throughout Eastern Europe : 90 percent of sales are made outside of Hungary . The Hungarian subsidiary generated pretax income of $ 200.000 in the current year . The Hong Kong subsidiary is an investment company that makes investments in world Financial markets : 100 percent of its income is generated from passive investments . The Hong Kong subsidiary Penetrated pretax income of 100,000 in the current year . Both subsidiaries distribute 100 percent of income to eBay Corporation as a dividend each year . Assuming that the income tax in Hungary ang Hong Kong is 12 % and 18 respectively . There is no withholding taxes in both countries -
1.Determine which income eamed by subsidiaries in Hungary and Hong Kong should be included in eBay Corp. U.S taxable income and WITY .
2- the amount of foreign tax credit allowed by the United States in the current year and the amount of excess foreign tax credit if any
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-0078025778
17th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello