U. S. International corporation (USIC), a U.S. taxpayer, has investments in foreign entities A-G. Relevant information for these entities for the current fiscal year appears in the following table:

Additional information:

1. Each entity is legally incorporated in its host country other than entity A, which is registered with the Argentina government as a branch.
2. Entities A, B, C, and F produce and market products in their home countries.
3. Entity D makes passive investments in stocks and bonds in the Hong Kong financial markets. Income is derived solely from dividends and interests.
4. Entity E markets goods purchased from (manufactured by) USIC. Of Es sales, 95% percent are made in Austria, Germany, and Switzerland, and 5 percent are made in Liechtenstein.
5. Entity G operates in the financial services industry in New Zealand.

Determine the following:

1. The amount of U.S. taxable income for each entity A-G.
2. The foreign tax credit allowed in the United States, first by basket and then in total.
3. The net U.S. tax liability generated from these foreign operations.

Hint: Refer to the flowchart for determining U.S. taxation of foreign operations (Exhibit 11.5).

\begin{tabular}{llclcccc} \hline & & & & & & & Net Amount \\ Entity & Country & \begin{tabular}{c} Percent \\ Owned \end{tabular} & Activity & \begin{tabular}{c} Income \\ before Tax \\ (\$ millions) \end{tabular} & \begin{tabular}{c} Income \\ Tax Rate \end{tabular} & \begin{tabular}{c} Withholding \\ Tax Rate \end{tabular} & \begin{tabular}{c} by Parent \\ (\$ millions) \end{tabular} \\ \hline USIC & United States & - & Manufacturing & $10 & 35% & - & - \\ A & Argentina & 100% & Manufacturing & $1 & 35 & 0% & $0.2 \\ B & Brazil & 100 & Manufacturing & $2 & 34 & 0 & $2.5 \\ C & Canada & 100 & Manufacturing & $3 & 26 & 5 & $1.0 \\ D & Hong Kong & 100 & Investment & $2 & 16.5 & 0 & $1.5 \\ E & Liechtenstein & 100 & Distribution & $3 & 10 & 4 & $0.0 \\ F & Japan & 51 & Manufacturing & $2 & 38 & 5 & $0.5 \\ G & New Zealand & 60 & Banking & $4 & 28 & 5 & $1.0 \\ \hline \end{tabular}