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(a)
Income from operations: Income statement reports revenues and expenses from business operations, and the result of those operations, before taxes, other revenues and expenses, is referred to as income from operations.
Profit margin: This ratio gauges the operating profitability by quantifying the amount of income earned from business operations from the sales generated.
Formula of profit margin:
Investment turnover: This ratio gauges the operating efficiency by quantifying the amount of sales generated from the assets invested.
Formula of investment turnover:
Formula of ROI according to Dupont formula:
To compute: Selling, general, and administrative expenses of each segment.
(b)
To compute: Property, plant, and equipment portion of each segment
(c)
To compute: Income from operations for CO and F Segments
(d)
To compute: Profit margin of each of the segments
(e)
Investment turnover of each of the segments
(f)
ROI of each of the segments using DuPont formula
(g)
To discuss: The variables that would impact the franchised Company HR in comparison to the non-franchised independent company.
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Chapter 9 Solutions
Bundle: Managerial Accounting, Loose-leaf Version, 14th - Book Only
- Calgary Corporation has permanent establishments in Alberta, British Columbia and Seattle in the United States. Gross revenues, Net Income and salaries and wages for each permanent establishment are: Net Income For Salaries Gross Revenue Tax Purposes And Wages Alberta $ 5,000,000 $500,000 $3,500,000 British Columbia 4,000,000 98,000 3,000,000 Seattle 4,500,000 325,000 2,000,000 Total $13,500,000 $923,000 $8,500,000 For the purposes of calculating the federal tax abatement, the percentage of income allocated to a Canadian province would be:arrow_forwardhe following information pertains to Sheffield Corp. and its divisions for the year ended December 31, 2021. Sales to unaffiliated customers $3960000 Intersegment sales of products similar to those sold to unaffiliated customers 910000 Interest earned on loans to other operating segments 60000 Sheffield and all of its divisions are engaged solely in manufacturing operations. Sheffield has a reportable segment if that segment's revenue exceeds $487000. $402000. $396000. $493000.arrow_forwardU.S. International Corporation (USIC), a U.S. taxpayer, has investments in Foreign Entities A-G. Relevant Information for these entities for the current fiscal year appears in the following table: Entity Country % Owned Activity Income before tax ($ millions) Income Tax Rate Dividend Withholding tax Rate Net Amount Received by Parent ($ millions) USIC United States 35.00% Argentina Brazil Canada Hong Kong 100% Liechtenstein 100% A B C D E F G 100% 100% 100% 51% Japan New Zealand 60% Manufacturing $10.00 Manufacturing $1.00 Manufacturing $2.00 Manufacturing $3.00 Investment $2.00 Distribution $3.00 Manufacturing $2.00 $4.00 Banking 35.00% 34.00% 26.00% 16.50% 10.00% 38.00% 28.00% 0% 0% 5% 0% 4% 5% 5% $0.20 $2.50 $1.00 $1.50 S- $0.50 $1.00 Additional Information 1. USIC's $10 million income before tax is derived from the production and sale of products in the United States. 2. Each entity is legally incorporated in its host country other than Entity A, which is registered with the…arrow_forward
- 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.arrow_forwardENKANTADYA Corporation furnished you its financial data for 2018 as follows: Gross income, Philippines - P 800,500Expenses, Philippines - 450,000Gross income Singapore - 700,000Expenses, Singapore - 400,000Personal expenses - 150,000Interest from time deposits, BPI, Philippines - 20,000 Interest on money market placement, net of tax - 22,000How much is the amount of final withholding tax on passive income ?arrow_forwardThe Tacurong Company has the following business income and expenses in year 2020: Gross Income From Philippine sources: From business 450,000 Dividends from domestic corporation 80,000 From other countries: Saudi Arabia 180,000 Australia 75,000 Japan 190,000 Total foreign income tax paid is 60,000 and Philippine quarterly income tax paid is 42,000. a. Compute for the income tax still due and payable if Tacurong is a domestic corporation. b. Compute for the tax still due and payable if Tacurong is a resident foreign corporation.arrow_forward
- What is the foreign tax credit X Corp, a US Corp, is able to take on its current year return based on the following facts: Taxable income: X Corp, 100% US income ---$10,000,000 X Corp's foreign branch, 100% non-US income ---$1,000,000 Foreign tax paid by the foreign branch--- $300,000arrow_forwardSantas Corporation is a diversified firm with operations in the United States, Canada, Chile, Spain, and France, each of which qualifies as a geographic segment. Data with respect to those segments follows: Segments: US Canada Chile Spain France Corporate-level Total Revenues (in thousands) Unaffiliated Intersegment Customers $ 1,600 900 1,200 560 600 $4,860 1.400 $6.260 Sales $0 300 120 200 $620 $620 Total $ 1,600 1,200 1,320 560 800 Profit (Loss) $400 300 480 (60) (220) $5,480 $900 1,400 200 $6.880 $ 1.100 Assets $ 600 400 700 360 180 $2,240 2,000 $4,240 Required: Determine which of the Santas segments would be reportable segments using the three criteria as stipulated under U.S. GAAP. Show your calculations. Note: Students must show all calculations under the three criteria to receive maximum points available. Space is provided below.arrow_forwardStarship Corporation reported the following geographical segment revenues for a recent and a prior fiscal year: Recent Year(in millions, rounded) Prior Year(in millions, rounded) Americas $10,479 $8,073 EMEA* 1,217 1,295 China/Asia Pacific 2,396 1,130 Channel Development** 1,731 1,546 Other 2,236 1,695 Total $18,059 $13,739 *Europe, Middle East, and Africa **Sells packaged coffee and teas globally a. Prepare a horizontal analysis of the segment data using the prior year as the base year. Round all percents to one decimal place. Enter all amounts in millions. If required, use minus sign to indicate the decreasing values. Starship Corporation Horizontal Analysis Recent Year (in millions) Prior Year (in millions) Increase (Decrease)Amount Increase (Decrease)Percent Americas $10,479 $8,073 $fill in the blank 15396ff9101df9f_1 fill in the blank 15396ff9101df9f_2% EMEA 1,217 1,295 fill in the blank 15396ff9101df9f_3 fill…arrow_forward
- AUSTRALIAN LAW AND TAXATION CASES Sinclair is also concerned about the income tax and FBT compliance for his staff. In particular, Sinclair employs one person, Que, who has been provided with the following items by the business: Wages of $80,000 per annum, paid directly to his partners account. Lump Sum Bonus of $5,000 where the business meets or exceeds turnover. Travel allowance of $60 per month to cover public transport costs to project sites. Mobile phone, valued at $1,300, for use whilst on site. Monthly phone bills are paid by the business. The business also provides staff with tea and coffee facilities each day and plans to provide an annual Christmas or birthday gift up to $150 in value each. Required: Advise Sinclair of the tax consequences of the above employment provisions by answering the following question set. Ensure you make reference to appropriate sources of tax law. No calculations are required. Explain the FBT consequences for the additional items provided by the…arrow_forwardAn offshore banking unit had the following offshore banking transactions within the Philippines during the taxable quarter ending September 30, 2021:With local commercial banks- P3,850,000With domestic corporations - P3,400,000With other offshore banking units- P4,700,000If the offshore banking unit can claim allowable deduction of P2,830,000, how much is the offshore banking unit’s income tax due?arrow_forwardDynasty Corp, just completed its third year of operations. It has the following financial information: Ws Philippines China Gross Income P1,250,000 P800,000 Deductions 950,000 500,000 a. Assuming that the taxpayer is a domestic corporation, what is the taxable income for the taxable year 2021? b. Using the data on (a), what is the tax due? C. Assuming that the taxpayer is a resident foreign corporation, what is the taxable income for the taxable year 2013? d. Using the data on (c), what is the tax due? e. Assuming that the taxpayer is a non-resident foreign corporation, what is the taxable income for the taxable year 2021? Using the data on (e), what is the tax due? f.arrow_forward