Principles of Managerial Finance (14th Edition) (Pearson Series in Finance)
14th Edition
ISBN: 9780133508079
Author: Gitman
Publisher: PEARSON
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Chapter 19, Problem 19.1P
Summary Introduction
To determine: The net funds available to the parent MNC if
(a) Foreign taxes can be applied as a credit against the MNC's U.S. tax liability
(b) No tax credits are allowed.
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If a branch of a foreign corporation (resident foreign corporation) derives net income of P20,000,000.00 to be remitted to the foreign head office, how much is the branch profits remittance tax?
Group of answer choices
P1,500,000.00
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5. Compute the income tax due for 2021 if XYZ is a private proprietary educational institution. XYZ reported the following gross income and expenses:
Philippines
Abroad
Gross income
38, 000, 000
14, 000, 000
52, 000, 000
Deductions
15, 000, 000
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23, 000, 000
11, 000, 000
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P8,500,000
P340,000
A U.S.-based MNC has three subsidiaries: S1 (40 percent owned by the MNC); S2 (33 percent owned by S1), and S3 (20 percent owned by S2). The taxable income for each firm is $100 million. The local taxes for each firm are $15 million, $20 million, and $10 million, respectively. The MNC's tax rate is 40 percent.
19. Can the MNC apply all of its local taxes as a credit against its U.S. taxes? If not, which subsidiaries can it use to get a credit against its U.S. taxes. Explain your rationale briefly.
20. Based on the "grossing up" concept, calculate all tax credits applicable to the MNC.
Chapter 19 Solutions
Principles of Managerial Finance (14th Edition) (Pearson Series in Finance)
Ch. 19.1 - Prob. 19.1RQCh. 19.1 - Prob. 19.2RQCh. 19.1 - Prob. 19.3RQCh. 19.1 - Prob. 19.4RQCh. 19.2 - Under FASB No. 52, what are the translation rules...Ch. 19.3 - Prob. 19.6RQCh. 19.3 - Explain how differing inflation rates between two...Ch. 19.3 - Discuss macro and micro political risk. What is...Ch. 19.3 - Prob. 1FOECh. 19.4 - Prob. 1GF
Ch. 19.4 - Prob. 19.9RQCh. 19.4 - Prob. 19.10RQCh. 19.4 - Prob. 19.11RQCh. 19.4 - Prob. 19.12RQCh. 19.5 - Prob. 19.13RQCh. 19.5 - Prob. 19.14RQCh. 19.5 - Prob. 19.15RQCh. 19.6 - Prob. 19.16RQCh. 19 - Prob. 1ORCh. 19 - Prob. 19.1WUECh. 19 - Prob. 19.2WUECh. 19 - Prob. 19.3WUECh. 19 - Prob. 19.4WUECh. 19 - Prob. 19.5WUECh. 19 - Prob. 19.1PCh. 19 - Prob. 19.2PCh. 19 - Prob. 19.3PCh. 19 - ETHICS PROBLEM Is there a conflict between...
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