Questions from International Accounting

Q: ABC Company has subsidiaries in Countries X, Y, and Z

ABC Company has subsidiaries in Countries X, Y, and Z. Each subsidiary manufactures one product at a cost of $10 per unit that it sells to each of its sister subsidiaries. Each buyer then distributes...

Q: Denker Corporation has a wholly owned subsidiary in Sri Lanka that manufactures

Denker Corporation has a wholly owned subsidiary in Sri Lanka that manufactures wooden bowls at a cost of $3 per unit. Denker imports the wooden bowls and sells them to retailers at a price of $12 per...

Q: Ranger Company, a U.S. taxpayer, manufactures and

Ranger Company, a U.S. taxpayer, manufactures and sells medical products for animals. Ranger holds the patent on Z-meal, which it sells to horse ranchers in the United States. Ranger Company licenses...

Q: The IRS has the authority to impose penalties on companies that significantly

The IRS has the authority to impose penalties on companies that significantly underpay taxes as a result of inappropriate transfer pricing. Acme Company transfers a product to a foreign affiliate at $...

Q: Sony Corporation reported the following in the summary of Significant Accounting Policies

Sony Corporation reported the following in the summary of Significant Accounting Policies included in the company’s 2012 annual report on Form 20-F (p. F-16): Translation of Foreign Currencies All ass...

Q: Sony Corporation reported the following in the Notes to Consolidated Financial Statements

Sony Corporation reported the following in the Notes to Consolidated Financial Statements included in the company’s 2012 annual report on Form 20-F (p. F-49): Foreign Exchange Forward Contracts and Fo...

Q: Cooper Grant is the president of Acme Brush of Brazil, the

Cooper Grant is the president of Acme Brush of Brazil, the wholly owned Brazilian subsidiary of U.S.-based Acme Brush Inc. Cooper Grant’s compensation package consists of a combination of salary and b...

Q: Global Electronics Company (GEC), a U.S. taxpayer

Global Electronics Company (GEC), a U.S. taxpayer, manufactures laser guitars in its Malaysian operation (LG-Malay) at a production cost of $120 per unit. LG Malay guitars are sold to two customers in...

Q: The New York Stock Exchange (NYSE) provides a list of

The New York Stock Exchange (NYSE) provides a list of non-U.S. companies listed on the exchange on its Web site (www.nyse.com). (Hint: Search the Internet for “NYSE List of Non-U.S. Listed Issuers.”)...

Q: The London Stock Exchange (LSE) provides a list of companies

The London Stock Exchange (LSE) provides a list of companies listed on the exchange on its Web site (www.londonstockexchange.com) under “Statistics” and “List of Companies.” Required: a. Determine th...