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Mikco, a foreign corporation, owns 100% of Flagco, a domestic corporation. Mikco manufactures a wide variety of fl ags for worldwide distribution. Flagco imports Mikco's fi nished goods for resale in the United States. Flagco's average fi nancial results for the last three years are as follows:Sales$20 millionCost of goods sold($15 million)Operating expenses($4 million)Operating profi t$1 millionFlagco's CFO has decided to use the comparable profi ts method to assess Flagco's exposure to an IRS transfer pricing adjustment by testing the reasonableness of Flagco's reported operating profi t of $1 million. An analysis of fi ve comparable uncontrolled U.S. distributorsindicates that the ratio of operating profi ts to sales is the most appropriate profi tability measure. After adjustments have been made to account for material differences between Flagco and the uncontrolled distributors, the average ratio of operating profi t to sales for each uncontrolled distributor is as follows: 6%, 8%, 10%, 10%, and 14%.Using this information regarding comparable uncontrolled U.S. distributors, apply the comparable profi ts method to assess the reasonableness of Flagco's reported profi ts. In addition, if an adjustment to Flagco's reported profi ts is required, compute the amount of that adjustment.
a) Calculate the employer's payroll taxes, using the following rates state unemployment, 4.3%: federal unemployment, 0.8% b) Illustrate the effects on the accounts and financial statements of recording the accrual of payroll taxes.
Anthony and Latrisha are married and have two sons, James, age 25 and Jonas, age 13. Both sons are properly claimed as dependents. Anthony and Latrisha's marginal tax rate is 25% in the current year and they file a joint return. Both James and Jon..
The Cruise Salad Company began March with zero cases of its Thousand Island dressing in work-in-process inventory. During March, Cruise started 125,000 cases into production.
What is the current financial reporting requirement for charity care? Do you agree or disagree with the current financial reporting requirement?
Accounting for Business Decisions -HI5001 - what is the interest expense for 2012 and how much equipment was purchased during the year
Assume all investments are short-term and readily marketable. The following transactions occurred.June 2; purchased 300 shares of Beaty Corporation common stock for $45 per share; July 1; purchased 200 Meng Corporation bonds for $220,000; July 30;..
What required rate of return for this stock would result in a price per share of $28? If McCracken had both earnings and growth and dividened at a rate of 10% what required rate of return would result in a price per share of 28?
Compute the annual depreciation expense for 2006 and 2007, and book value at December 31, 2007, under the straight-line method.
What is the breakeven point in sales dollars for Win?
The part would be sold for $7000 or modified for $10000 and sold for 20300. Which of data is relevant to the decesion about the obsolete parts?
The materials inventory increased from the beginning to the end of the period by $12,000, while the work in process inventory decreased from the beginning to the end of the period by $5,000. What is the cost of goods manufactured?
Maggie Sharrer Company borrows $88,500 on Sept. 1, 2008, from Sandwich State Bank by signing an $88,500, 12%, one-year note. What is the accrued interest at Dec. 31, 2008?
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