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Case 4 Assume the following for purposes of calculating Company XYZ's Q2, 20X1 interim tax provision. All foreign subsidiaries are listed below. XYZ Italy has
| Case 4 | Assume the following for purposes of calculating Company XYZ's Q2, 20X1 interim tax provision. All foreign subsidiaries are listed below. XYZ Italy has a full valuation allowance. | ||||||||||||||
| Full Year | Full Year | Year to Date | |||||||||||||
| Projected Pre-tax Income / (Loss) | Projected Tax Expense / (Benefit) | Pre-tax Income / (Loss) | |||||||||||||
| XYZ U.S. (Parent Company) | 5,000,000 | 1,750,000 | 2,500,000 | ||||||||||||
| XYZ Italy | (2,000,000) | - | (1,000,000) | ||||||||||||
| XYZ Spain | 15,000,000 | 3,000,000 | 7,500,000 | ||||||||||||
| XYZ U.K. | 750,000 | 280,000 | 375,000 | ||||||||||||
| Question a | What is the projected pre-tax income for purposes of calculating the worldwide projected tax rate? | ||||||||||||||
| Question b | Considering Question a above, what is the Q2 YTD interim tax provision? | ||||||||||||||
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Using Financial Accounting Information The Alternative to Debits and Credits
Authors: Gary A. Porter, Curtis L. Norton
7th Edition
978-0-538-4527, 0-538-45274-9, 978-1133161646
