Questions from Taxation

Q: This year, Mesa Inc.’s before-tax income was

This year, Mesa Inc.’s before-tax income was $9,877,000. It paid $419,000 income tax to Minnesota and $385,000 income tax to Illinois. a. Compute Mesa’s federal income tax. b. What is Mesa’s tax rate...

Q: Akita is a U.S. corporation. This year,

Akita is a U.S. corporation. This year, it earned $8 million before-tax income and paid $450,000 income tax to jurisdictions other than the United States. Compute Akita’s U.S. income tax assuming that...

Q: Zenon Inc. has the following taxable income. U

Zenon Inc. has the following taxable income. U.S. source income ……………………………$1,900,000 Foreign source income   ……………………….240,000 Taxable income ………………………………….$2,140,000 Zenon paid $33,000 foreign inc...

Q: Jackson Inc. has the following taxable income. U

Jackson Inc. has the following taxable income. U.S. source income ………………………………$18,800,000 Foreign source income  …………………………..2,690,000 Taxable income ……………………………………..$21,490,000 Jackson paid $1,040,...

Q: Elmo Inc. is a U.S. corporation with a

Elmo Inc. is a U.S. corporation with a branch office in foreign Country Z. During the current year, Elmo had $340,000 of U.S. source income and $60,000 of foreign source income from Z, on which Elmo p...

Q: Watch Corporation has U.S. source income for the current

Watch Corporation has U.S. source income for the current year of $2 million, foreign source income from Country X of $3 million, and foreign source income from Country Y of $1 million, for total taxab...

Q: Firm L has $500,000 to invest and is considering

Firm L has $500,000 to invest and is considering two alternatives. Investment A would pay 6 percent ($30,000 annual before-tax cash flow). Investment B would pay 4.8 percent ($24,000 annual before tax...

Q: Axtell Corporation has the following taxable income. U.

Axtell Corporation has the following taxable income. U.S. source income ……………………..$1,620,000 Foreign source income: Country A ………………………………………….550,000 Country B ……………………………………….2,000,000 Country C...

Q: Transcom, an Ohio corporation, earned $700,000 U

Transcom, an Ohio corporation, earned $700,000 U.S. source income from sales of goods to U.S. customers and $330,000 foreign source income from sales of goods to customers in Canada. Canada’s corporat...

Q: Aqua, a South Carolina corporation, is a 20 percent partner

Aqua, a South Carolina corporation, is a 20 percent partner in a Swiss partnership. This year, Aqua earned $2 million U.S. source income and $190,000 foreign source income. It paid no foreign income t...