Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

ABC limited (An Australian company) imports die-cast parts from its Chinese subsidiary that are used in the production of childrens toys. Per unit, part 126

ABC limited (An Australian company) imports die-cast parts from its Chinese subsidiary that are used in the production of childrens toys. Per unit, part 126 costs the Chinese subsidiary AUD $200 and AUD $20 to ship to ABC limited.
ABC limited uses part 126 to produce a toy airplane that it sell to local stores for AUD $600 per unit. The following tax rates apply:
Chinese income tax: 25%
Australian income tax: 30%
Australian import duty: 10% of invoice price Required:
a. Calculate the total amount of income taxs and import duties paid to the Australian and Chinese government if part 126 is sold to ABC limited at the price of AUD $300 per unit.
b. Calculate the total amount of income taxs and import duties paid to the Australian and Chinese government if part 126 is sold to ABC limited at the price of AUD $400 per unit.
c. Explain why the results got in part (a) and (b) differ.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Global Financial Systems Stability And Risk

Authors: Jon Danielsson

1st Edition

0273774662, 9780273774662

More Books

Students also viewed these Accounting questions

Question

Explain the place of planning in human resource management

Answered: 1 week ago