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Please Help I can not figure out the tax amount. Crain Company has a manufacturing subsidiary in Singapore that produces high-end exercise equipment for U.S.
Please Help I can not figure out the tax amount.
Crain Company has a manufacturing subsidiary in Singapore that produces high-end exercise equipment for U.S. consumers. The manufacturing subsidiary has total manufacturing costs of $1,540,000, plus general and administrative expenses of $354,000. The manufacturing unit sells the equipment for $2540,000 to the U.S. marketing subsidiary, which sells it to the final consumer for an aggregate of $3,540,000. The sales subsidiary has total marketing. general, and administrative costs of $204,000. Assume that Singapore has a corporate tax rate of 17% and that the U.S. tax rate is 21%. Assume that no tax treatles or other speclal tax treatments apply. Required: What is the effect on Crain Company's total corporate-level taxes if the manufacturing subsidary ralses its price to the sales subsidiary by 20% ? (Do not round intermediate calculations. Input all amounts as positive values.)Step by Step Solution
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