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Recently, a maintenance facility opened in Malaysia. That facility proposed to Cargo Division that it could conduct the maintenance in Malaysia. The facility proposed a

Recently, a maintenance facility opened in Malaysia. That facility proposed to Cargo Division that it could conduct the maintenance in Malaysia. The facility proposed a price of $42 million for the services that Maintenance Division in Hong Kong provided to Cargo Division. Maple management estimated that had the services been provided in New Zealand, the costs for the year would have totaled $59 million. In its latest tax filing, Maple assigned the $59 million as the appropriate transfer price Cargo paid for the services from Maintenance. The New Zealand tax authorities denied that expense and instead applied $42 million as the appropriate transfer price.

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  1. Calculate the total revenue, total costs, and income taxes for both the Cargo Division and the Maintenance Division and the total taxes for the company as a whole using Malaysia basis. Do not round intermediate calculations. Enter amounts in thousands.
  2. Calculate the total revenue, total costs, and income taxes for both the Cargo Division and the Maintenance Division and the total taxes for the company as a whole using the New Zealand basis. Do not round intermediate calculations. Enter amounts in thousands.
  3. What is the difference in tax costs to Maple between the alternate transfer prices for maintenance services, that is, the difference between a transfer price of $42 million and $59 million? Do not round intermediate calculations. Enter amounts in thousands.

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