RadioCo, a domestic corporation, owns 100% of TVCo, a manufacturing facility in
ID: 2797162 • Letter: R
Question
RadioCo, a domestic corporation, owns 100% of TVCo, a manufacturing facility in Ireland. TVCo has no operations or activities in the United States. The U.S. tax rate is 35%, and the Irish tax rate is 12.5%. For the current year, RadioCo earns $200,000 in taxable income from its U.S. operations. TVCo earns $800,000 in taxable income from its operations, pays $100,000 in taxes to Ireland, and makes no distributions to RadioCo. For tax rates, enter your answers as a percentage. a. Enter the correct amounts below for Without ASC 740-30 (APB 23) and With ASC 740-30 (APB 23).
Without ASC 740-30 (APB 23): RadioCo's total tax expense and effective tax rate for book purposes is $ ______and _______%.
With ASC 740-30 (APB 23): RadioCo's total tax expense and effective tax rate for book purposes is $ _______and__________ %.
Explanation / Answer
Tax expense= 170000, effective tax rate= 17%
With ASC:
Total tax expense= 415000= 170000+245000
Effective tax rate= 41.5%
Without ASC 740-30 Entity Taxable income Tax rate Taxes Radio Co 2,00,000 35% 70,000 TVCo 8,00,000 12.50% 1,00,000 Consolidated amount 10,00,000 1,70,000 Effective tax rate Income tax expense/ taxable income *100 170000/1000000 *100 17.00%Related Questions
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