Zen Energies is a Chinese branch of Super Sigma Inc., incorporated in U.S. In the year ending Dec. 31, 2019, the net income of Zen was 25 million Yuan before tax of 25%. During the year the average exchange rate was 0.16379 Yuan per dollar. The exchange rate on the date of payment of taxes is was 0.16474 Yuan per dollar. Determine the amount of U.S. taxable income.

Question

Quizplus · Accepted Answer

Step 1: Calculate the net income before tax in USD:
25,000,000 yuan x 0.16379 USD/yuan = $4,094,750
Step 2: Calculate the taxable income in USD:
Taxable income = net income before tax in USD - (net income before tax in USD x tax rate)
Taxable income = $4,094,750 - ($4,094,750 x 0.25) = $3,071,062.5
Step 3: Round up to the nearest cent:
Taxable income = $3,071,062.5 ≈ $3,071,100
Therefore, the answer is D) $4.1007 million.

Zen Energies Is a Chinese Branch of Super Sigma Inc