USCO owns 100 percent of the following corporations: Dutch N.V., Germany A.G., Australia PLC, Japan Corporation, andBrazil S.A. During the year, the following transactions took place:Determine whether these transactions result in Subpart F income.Required:a. Germany A.G. owns an office building that it leases to unrelated persons. Germany A.G. engaged an independentmanaging agent to manage and maintain the office building and performs no activities with respect to the property.b. Dutch N.V. leased office machines to unrelated persons. Dutch N.V. performed only incidental activities and incurrednominal expenses in leasing and servicing the machines. Dutch N.V. is not engaged in the manufacture or productionof the machines and does not add substantial value to the machines.c. Dutch N.V. purchased goods manufactured in France from an unrelated contract manufacturer and sold them toGermany A.G. for consumption in Germany.d. Australia PLC purchased goods manufactured in Australia from an unrelated person and sold them to JapanCorporation for use in Japan.Complete this question by entering your answers in the tabs below.Required Required RequiredABRequiredDсGermany A.G. owns an office building that it leases to unrelated persons. Germany A.G.engaged an independent managing agent to manage and maintain the office building andperforms no activities with respect to the property.Show less

Corporation - A company is a separate legal entity from its shareholders. Many of the same legal rights and obligations apply to corporations as to people. They are able to sign contracts, make loans and take loans, sue and be sued, hire staff, possess assets, and pay taxes.a) No, as Germany A.G. doesn't carry out any operations involving the property. Germany A.G. does not engage in any operations connected to the property, hence it does not satisfy the active business criterion for Subpart F income. A corporation can only have Subpart F income if it is actively conducting business. Germany Despite having leased the property to unaffiliated parties, A.G. is not now running a business in relation to it. As a result, the income from the property is not considered Subpart F income. b) No, because Dutch N.V. only carries out incidental tasks and doesn't significantly enhance the value of the machines. Due to the fact that Dutch N.V. solely engages in incidental activities, it does not meet the requirement of an operating business for Subpart F income. To have Subpart F income, a corporation must be actively conducting business. Because it simply engages in incidental operations and does not significantly add value to the leased machines, Dutch N.V. is still not actively engaged in a company. Because of this, the income from the machines is not treated as Subpart F income. c) No, as Dutch N.V. does not produce or manufacture the goods that it buys from France. Due to the fact that Dutch N.V. does not make the goods it purchased from France, the company does not satisfy the manufacturing or producing criterion for Subpart F income. For a corporation to have income under Subpart F, the corporation must be engaged in the production or manufacturing of the items. Despite the fact that Dutch N.V. merely purchases the products and sells them to Germany A.G. for consumption, it does not produce or manufacture the commodities. Therefore, the revenue from the items is not considered to be Subpart F revenue. d) No, as Australia PLC does not produce or manufacture the goods that are bought from Australia. Because it does not make or produce the commodities that it purchases from Australia, Australia PLC does not meet the manufacturing or producing criterion for Subpart F income. To qualify for income under Subpart F, a corporation must be involved in the creation or manufacture of the items. The fact that Australia PLC merely purchases the goods and sells them to Japan Corporation for usage does not change the fact that it is not involved in their creation or manufacturing. As a result, the income from the items is not considered Subpart F income.

Business

Accounting

il S.A. During the year, the following transactions took place: rmine whether these transactions result in Subpart F income. ired: ermany A.G. owns an office building that it leases to unrelated persons. Germany A.G. engaged an indep anaging agent to manage and maintain the office building and performs no activities with respect to the tch N.V. leased office machines to unrelated persons. Dutch N.V. performed only incidental activities and minal expenses in leasing and servicing the machines. Dutch N.V. is not engaged in the manufacture or the machines and does not add substantial value to the machines. utch N.V. purchased goods manufactured in France from an unrelated contract manufacturer and sold the ermany A.G. for consumption in Germany. stralia PLC purchased goods manufactured in Australia from an unrelated person and sold them to Japa

il S.A. During the year, the following transactions took place: rmine whether these transactions result in Subpart F income. ired: ermany A.G. owns an office building that it leases to unrelated persons. Germany A.G. engaged an indep anaging agent to manage and maintain the office building and performs no activities with respect to the tch N.V. leased office machines to unrelated persons. Dutch N.V. performed only incidental activities and minal expenses in leasing and servicing the machines. Dutch N.V. is not engaged in the manufacture or the machines and does not add substantial value to the machines. utch N.V. purchased goods manufactured in France from an unrelated contract manufacturer and sold the ermany A.G. for consumption in Germany. stralia PLC purchased goods manufactured in Australia from an unrelated person and sold them to Japa

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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Using WORKSHEET that is provided, indicate for each of the statements whether it is True (T) or False (F) according to NZ IAS 12. If the statement is false, rewrite the statement to make it true. If the statement is true, you do not need to explain. Worksheet Item T/F (a) Information: A company has recorded $1m goodwill on the balance sheet. For tax purposes, goodwill impairment is never allowed as a deductible expense. Statement: Therefore, the tax base of the goodwill is $1m. Rewrite Statement:
Which of the following corporations would not be considered resident in Canada for tax purposes?1)Axem Inc. was incorporated in Manitoba on April 5, 1965 and has carried on business in Canada sincethat date. 2)Linco Ltd. was incorporated in Ontario on April 4, 1985 and, until the end of 1999,all of the operations and board of directors meetings were held in the southern United States. In 2000,all of the management and operations of the Company moved to Toronto. 3)Norad Inc. was incorporated in New York state on March 1, 1985 and, until the end of 1993, carried on business in Canada. At that time, all of the management and operations of the Company moved to the southern United States. 4)Rio Amgal Inc. was incorporated in Manitoba on September 3, 2010. While the Company hasoperations in both Canada and the U.S., the directors live in Calgary. As a consequence, all director’smeetings are held in that city. 5)In all cases the corporations would be considered residents of Canada.
On july 1, 2021, JULIA exchanged its-non-monetary asset (equipment) with GERALD's non-monetary asset (machinery). the following data were made available: JULIA: Equipment P4,400,000 accumulated depreciation 2,000,000 cash received from gerald 500,000 GERALD: Machinery P3,700,000 Accumulated depreiation 1,800,000 Fair value of the machinery 2,100,000 The transaction lack commerical substance. How much is the cost of the new asset of JULIA?
Enders, Inc., a domestic corporation that invests in foreign securities, reports total taxable income for the tax year of $382,500, consisting of $267,750 in U.S.-source business profits and $114,750 of Subpart F income from foreign sources. Income taxes of $34,425 were withheld by foreign tax authorities. Enders' U.S. tax before the FTC is $96,390. If required, round any division to two decimal places and round your final answer to the nearest dollar. Compute Enders' FTC for the tax year using MicrosoftExcel.