BayArea Designs Inc., located in Northern California, has two international subsidiaries, one located in the Ukraine, the other in Korea. Consider the information below to answer the next several questions.

Refer to Table 15.1. The additional U.S. taxes due on the repatriation of income from the Ukraine to the United States, alone, assuming a 50% payout rate, is:

A) excess foreign tax credits of $110,000.

B) additional U.S. taxes due of $97,000.

C) additional U.S. taxes due of $36,500.

D) excess foreign tax credits of $18,500

SHOW DETAIL CALCULATION

Ukraine $2,000,000 40% 10% Korea United States Earnings Before Taxes Corporate Income Tax Rate Dividend withholding Tax Rate $2,500,000 26% 35% 9% 590 0%