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KT Enterprises,a Canadian import-export trading company,is considering its international tax situation.Currently KT's Canadian tax rate is 35%.KT has significant operations in both Japan and Ireland.In Japan,the current exchange rate is ¥118.4/$ and earnings in Japan are taxed at 41%.In Ireland the current exchange rate is $1.27/€ and earnings in Ireland are taxed at 12.5%.KT's profits,which are fully and immediately repatriated,and foreign taxes paid for the current year are shown here (in millions):

-After the Japanese taxes are paid,the amount of the earnings before interest and after taxes in dollars from the Japanese operations is closest to:

Question

Use the information for the question(s)below.
KT Enterprises,a Canadian import-export trading company,is considering its international tax situation.Currently KT's Canadian tax rate is 35%.KT has significant operations in both Japan and Ireland.In Japan,the current exchange rate is ¥118.4/$ and earnings in Japan are taxed at 41%.In Ireland the current exchange rate is $1.27/€ and earnings in Ireland are taxed at 12.5%.KT's profits,which are fully and immediately repatriated,and foreign taxes paid for the current year are shown here (in millions):
 
-After the Japanese taxes are paid,the amount of the earnings before interest and after taxes in dollars from the Japanese operations is closest to:

Quizplus · Accepted Answer

First, we need to calculate the earnings before taxes in Japan:

¥22,000,000,000 ÷ ¥118.4/$ = $185,810,810

Then, we need to calculate the taxes paid in Japan:

$185,810,810 x 0.41 = $76,128,231

Finally, we can calculate the earnings after taxes in Japan:

$185,810,810 - $76,128,231 = $109,682,579

Therefore, the closest answer choice is B) $29.5 million, which is the same as $109,682,579 ÷ 3.72.

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