Hart Enterprises, a U.S. corporation, owns 100% of OK, Ltd., an Irish corporation. OK's gross income for the year is $10,000,000.Determine OK's Subpart F income (before any expenses) from the transactions that it reported this year.If an amount is zero, enter "0". TransactionIncome Includedin Subpart Fa. OK received $600,000 from sales of products purchased from Hart and sold to customers outside Ireland.$b. OK received $1,000,000 from sales of products purchased from Hart and sold to customers in Ireland.$c. OK received $400,000 from sales of products purchased from unrelated suppliers and sold to customers in Germany.$d. OK purchased raw materials from Hart, used these materials to manufacture finished goods, and sold these goods to customers in Italy. OK earned $300,000 from these sales.$e. OK received $100,000 for the performance of warranty services on behalf of Hart. These services were performed in Japan for customers located in Japan.$f. OK received $50,000 in dividend income from investments in Canada and Mexico.$

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Answered: Hart Enterprises, a U.S. corporation,…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Hart Enterprises, a U.S. corporation, owns 100% of OK, Ltd., an Irish corporation. OK's gross income for the year is $10,000,000.

Determine OK's Subpart F income (before any expenses) from the transactions that it reported this year.

If an amount is zero, enter "0".

	Transaction	Income Included in Subpart F
a.	OK received $600,000 from sales of products purchased from Hart and sold to customers outside Ireland.	$
b.	OK received $1,000,000 from sales of products purchased from Hart and sold to customers in Ireland.	$
c.	OK received $400,000 from sales of products purchased from unrelated suppliers and sold to customers in Germany.	$
d.	OK purchased raw materials from Hart, used these materials to manufacture finished goods, and sold these goods to customers in Italy. OK earned $300,000 from these sales.	$
e.	OK received $100,000 for the performance of warranty services on behalf of Hart. These services were performed in Japan for customers located in Japan.	$
f.	OK received $50,000 in dividend income from investments in Canada and Mexico.	$

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