Use the information to answer the following question(s).
Rogue River Exporters USA has $100,000 of before-tax foreign income. The host country has a corporate income tax rate of 25% and the U.S. has a corporate income tax rate of 35%.
-Refer to Instruction 14.1. If the U.S. has no bilateral trade agreement with the host country, what is the total amount of income taxes Rogue River Exporters will pay?
A) $25,000
B) $35,000
C) $51,250
D) $60,000

Question

Quizplus · Accepted Answer

First, calculate the amount of foreign income tax paid to the host country: 
$100,000 x 25% = $25,000 
Next, calculate the amount of U.S. tax on the remaining foreign income: 
($100,000 - $25,000) x 35% = $26,250 
Finally, add the two taxes together: 
$25,000 + $26,250 = $51,250

Use the Information to Answer the Following Question(s)