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[answered] California Cars is a U. manufacturer of electric cars. Cali


Need help completing an accounting question for my Business Law course. ?Please see attached spreadsheet.


1. California Cars is a U.S. manufacturer of electric cars. California Cars has $5 billion of U.S. tax

 

$4 billion of which is U.S.-source income and $1 billion of which is foreign-source income. Califo

 

a U.S. tax rate of 35% and paid foreign taxes of $280 million. The firm?s foreign source income f

 

general basket. It is the first year of California Cars? foreign operations, so don?t worry about fo

 

carryforwards or carrybacks.

 

a. What is California Cars? foreign tax credit, and what is its worldwide tax paid for the year? b. Now suppose that California Cars engaged in tax-reduction strategies abroad, reducing its fo

 

$200 million but holding all else constant. What is California Cars? foreign tax credit, and what i

 

tax paid for the year? c. What possible benefit might California Cars receive from reducing its foreign taxes paid in pa In particular, suppose that the foreign country in which California Cars operates is likely to enac

 

increase in its tax rate next year. a. What is California Cars? foreign tax credit, and what is its worldwide tax paid for the year? check figure: $1,750 million

 

U.S. tax before FTC =

 

FTC = min =

 

U.S. tax after FTC =

 

Worldwide tax = <-create formula - to earn points yo

 

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<-create formula - to earn points yo b. Now suppose that California Cars engaged in tax-reduction strategies abroad, reducing its for

 

but holding all else constant. What is California Cars' foreign tax credit, and what is its worldwi U.S. tax before FTC =

 

FTC = min =

 

U.S. tax after FTC =

 

Worldwide tax = <-create formula - to earn points yo

 

<-create formula - to earn points yo

 

<-create formula - to earn points yo

 

<-create formula - to earn points yo Does this tax strategy affect the firms worldwide tax burden? c. What possible benefit might California Cars receive from reducing its foreign taxes paid in par

 

In particular, suppose that the foreign country in which California Cars operates is likely to enact

 

type your response here. Consider the excess FTC limitation and carrybacks. ifornia Cars has $5 billion of U.S. taxable income?

 

which is foreign-source income. California Cars faces

 

n. The firm?s foreign source income falls in the

 

operations, so don?t worry about foreign tax credit s worldwide tax paid for the year? tion strategies abroad, reducing its foreign taxes to

 

a Cars? foreign tax credit, and what is its worldwide m reducing its foreign taxes paid in part b? ifornia Cars operates is likely to enact a dramatic worldwide tax paid for the year? heck figure: $1,750 million create formula - to earn points you must show calculations

 

create formula - to earn points you must show calculations

 

create formula - to earn points you must show calculations

 

create formula - to earn points you must show calculations on strategies abroad, reducing its foreign taxes to $200 million,

 

gn tax credit, and what is its worldwide tax paid for the year? create formula - to earn points you must show calculations

 

create formula - to earn points you must show calculations

 

create formula - to earn points you must show calculations

 

create formula - to earn points you must show calculations educing its foreign taxes paid in part b? ornia Cars operates is likely to enact a dramatic increase in its tax rate next year.

 

and carrybacks.

 


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