Using US Standards of accounting. 

1. Covington Manufacturing Corporation recognizes income from foreign and domestic sources.

 If applicable to Covington’s foreign tax credit calculation, indicate the income categories specified in section 904(d) that apply to foreign income the Corporation recognized during the current year.

Foreign source income earned directly by Covington from its unincorporated distribution center in Hong Kong.

2. Inclusion of subpart F income from foreign base company sales income recognized by its wholly-owned controlled foreign corporation, Covington Netherlands BV, a distribution company operating in the Netherlands.

Income from the sale of product manufactured at its plant located in Tennessee and sold to customers in Mexico and South America.

1. d. Receipt of royalty from Covington’s Canadian operating branch for use of the “Covington” brand name in Canada.
2. e. Inclusion of subpart F income for foreign personal holding company income recognized by its distribution company operating in Netherlands, Covington Netherlands BV.

f. Tested income earned by Covington UK Ltd, a wholly owned corporation organized in the United Kingdom. Covington Manufacturing Corporation had an inclusion percentage of 10%.

g. Dividend received from a non-controlled foreign corporation that qualifies for the foreign dividend received deduction.

Answer rating: 100% (QA)

Answer A Income receive by convington from Unincorporation distribution centre in HONGKONG It Is PAS... View the full answer