Elmo Incorporated is a U.S. corporation with a branch office in foreign country Z. During the current year, Elmo had $372,000 of U.S. source income and $42,000 of foreign source income from Z, on which Elmo paid $19,600 of country Z income tax.

Required:

1. Calculate Elmos U.S. tax liability before foreign tax credit, maximum foreign tax credit allowable, and net U.S. tax liability after foreign tax credit.
2. If Elmo had paid only $5,320 of country Z income tax, calculate Elmos foreign tax credit allowable and net U.S. tax liability after foreign tax credit.