Celestial Artistry Company is developing departmental overhead rates based on direct-labor hours for its two production Department. Etching and Finishing. The Etching, Department employs 20 people and the Finishing Department employs 80 people. Each person in these two departments works 2,000hours per year. The production-related overhead costs for the Etching Department are budgeted at $200.000, and the Finishing Department costs are budgeted at $320.000. Two service departments. Maintenance and Computing directly support the two production departments. These service department, have budgeted costs of $48,000 and $250,000 respectively. The production department’s overhead rates cannot be determined until the service department’s costs are allocated. The following schedule reflects the use of the Maintenance Departments and Computing Department’s output by the various departments.
Using Department
Service Department Maintenance Computing Etching Finishing
Maintenance(maintenance hours) 0 1,000 1,000 8,000
Computing (minutes) 240,000 0 840,000 120,000
Required:
1. Use the direct method to allocate service department costs. Calculate the overhead rates per direct labor hour for the Etching Department and the Finishing Department.
2. Use the step–down method to allocate service department costs. Allocate the Computing Department’s costs first. Calculate the overhead rates per direct-labor hour for the Etching Department and the Finishing Department.

Answers

Answer 1

Answer:

Celestial Artistry Company

1. Allocation of Service departments costs (direct method):

                                Service Dept             Production Dept.

                       Maintenance Computing  Etching     Finishing   Total

Overheads          $48,000   $250,000 $200,000 $320,000 $818,000

Maintenance       (48,000)                            5,333      42,667     0

Computing                            (250,000)    218,750      31,250     0

Total costs            $0            $0             $424,083 $393,917  $818,000

Direct labor hours                                      40,000   160,000

Overhead rate per direct labor hour       $10.602    $2.462

2. Allocation of Service departments costs (step-down method):

                                Service Dept             Production Dept.

                       Maintenance Computing  Etching     Finishing   Total

Overheads          $48,000   $250,000 $200,000 $320,000 $818,000

Computing            50,000    (250,000)    175,000     25,000     0

Maintenance       (98,000)           0             10,889         87,111     0

Total costs            $0            $0            $385,889     $432,111  $818,000

Direct labor hours                                     40,000     160,000

Overhead rate per direct labor hour       $9.647       $2.701

Explanation:

a) Data and Calculations:

                                                        Etching      Finishing          Total

Employees                                            20                 80              100

Direct labor hours per year            2,000           2,000

 (per employee)

Total direct labor hours/year       40,000       160,000         200,000

Production-related overhead $200,000    $320,000       $520,000

                                       Service Dept             Production Dept.

                               Maintenance Computing  Etching   Finishing   Total

Overheads                $48,000   $250,000 $200,000 $320,000 $818,000  

Maintenance

(maintenance hours)          0            1,000        1,000        8,000      10,000

Computing (minutes) 240,000               0    840,000   120,000 1,200,000

Direct Allocation of Service Departments Overheads:

Maintenance Overhead:

Etching = $5,333 ($48,000 * 1,000/9,000)

Finishing = $42,667 ($48,000 * 8,000/9,000)

Computing Overhead:

Etching = $218,750 ($250,000 * 840,000/960,000)

Finishing = $31,250 ($250,000 * 120,000/960,000)

Step-down Allocation of Service Departments Overheads

Computing Overhead:

Maintenance = $50,000 ($250,00 * 240,000/1,200,000)

Etching = $175,000 ($250,00 * 840,000/1,200,000)

Finishing = $25,000 ($250,00 * 120,000/1,200,000)

Maintenance Overhead of $98,000:

Etching = $10,889 ($98,000 * 1,000/9,000)

Finishing = $87,111 ($98,000 * 8,000/9,000)


Related Questions

Firm X develops and licenses its designs to be produced by outside manufacturers. Firm Y develops and manufactures its own designs. If the total invested capital of the two firms is the same, which likely has more equity capital and why

Answers

Answer:

Firm X

Explanation:

In simple words, since the firm X is asset heavy they will have more equity capital in their accounts. On average, companies that adopt asset-light models achieve higher profits. Both provide the identical invested capital, but X has more equity wealth so it can have higher returns on investments.

Thus, from the above we can conclude that the correct answer is firm X.

Which organization compiles data on individuals and businesses to report on their credit?
TransUnion
The Bureau of Consumer Protection
The National Credit Union Administration
Vantage Scores

Answers

Answer:

Option A

Explanation:

There are primarily three credit bureaus to which the Lenders go namely -

a) TransUnion

b) Equifax

c) Experian

These three agencies are interested in reviewing credit reports before lending any financial aid.

Hence, option A is correct

Answer:

TransUnion

Explanation:

Describe the life cycle of a product and explain profitability and sales volume at each stage

Answers

Answer:

Product Life Cycle: Overview

The product life cycle (PLC) describes a product's life in the market with respect to business/commercial costs and sales measures. It proceeds through multiple phases, involves many professional disciplines and requires many skills, tools and processes.

This is not to say that product lives cannot be extended – there are many good examples of this – but rather, each product has a ‘natural’ life through which it is expected to pass.

The stages of the product life cycle are:

Introduction

Growth

Maturity

Decline

PLC management makes these three assumptions:

Products have a limited life and, thus, every product has a life cycle.

Product sales pass through distinct stages, each of which poses different challenges, problems and opportunities to its parent company.

Products will have different marketing, financing, manufacturing, purchasing and human resource requirements at the various stages of its life cycle.

The product life cycle begins with the introduction stage (see ). Just because a product successfully completes the launch stage and starts its life cycle, the company cannot take its success for granted.

image

Product Development and Product Life Cycle: The Product Life Cycle follows directly after new product development.

A company must succeed at both developing new products and managing them in the face of changing tastes, technologies and competition. A good product manager should find new products to replace those that are in the declining stage of their life cycles; learning how to manage products optimally as they move from one stage to the next.

Product Lifecycle Management Stage 1: Market Introduction

This stage is characterized by a low growth rate of sales as the product is newly launched and consumers may not know much about it. Traditionally, a company usually incurs losses rather than profits during this phase. Especially if the product is new on the market, users may not be aware of its true potential, necessitating widespread information and advertising campaigns through various media.

However, this stage also offers its share of opportunities. For example, there may be less competition. In some instances, a monopoly may be created if the product proves very effective and is in great demand.

Characteristics of the introduction stage are:

High costs due to initial marketing, advertising, distribution and so on.

Sales volumes are low, increasing slowly

There may be little to no competition

Demand must be created through promotion and awareness campaigns

Customers must be prompted to try the product.

Little or no profit is made owing to high costs and low sales volumes

Growth

During the growth stage, the public becomes more aware of the product; as sales and revenues start to increase, profits begin to accrue.

Explanation:

Ahsan Company makes 60,000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is computed as follows: Direct materials $12.60 Direct labor 17.20 Variable manufacturing overhead 4.10 Fixed manufacturing overhead 15.00 Unit product cost $48.90 An outside supplier has offered to sell the company all of these parts it needs for $69.70 a unit. If the company accepts this offer, the facilities now being used to make the part could be used to make more units of a product that is in high demand. The additional contribution margin on this other product would be $319,600 per year. If the part were purchased from the outside supplier, all of the direct labor cost of the part would be avoided. However, $4.30 of the fixed manufacturing overhead cost being applied to the part would continue even if the part were purchased from the outside supplier. This fixed manufacturing overhead cost would be applied to the company's remaining products. How much of the unit product cost of $48.90 is relevant in the decision of whether to make or buy the part? Multiple Choice $44.60 $17.20 $69.70

Answers

Answer:

Ahsan Company

Only $44.60 of the unit product cost of $48.90 is relevant in the decision of whether to make or buy the part.

Explanation:

a) Data and Calculations:

Annual units of parts produced = 60,000

Unit product costs:

Direct materials                              $12.60

Direct labor                                       17.20

Variable manufacturing overhead    4.10

Fixed manufacturing overhead      15.00

Unit product cost                         $48.90

Outside supplier's offer price per unit = $69.70

Relevant /avoidable costs:

Direct materials                                   $12.60

Direct labor                                            17.20

Variable manufacturing overhead         4.10

Fixed manufacturing overhead           10.70

Unit product cost                              $44.60

Opportunity cost ($319,600/60,000)   5.33

Total avoidable/relevant costs/unit $49.93

Patrick offered to sell his house to Jarrod for $50,000. Jarrod was interested but did notwish to decide immediately so he asked Patrick if he would hold the offer open for thirty daysin exchange for fifty dollars. Patrick agreed.

Three days later Jarrod called Patrick and told him he doubted he would purchase the property because his family was not enthusiastic about moving, but he was still trying toconvince them to relocate. The next week, Patrick sold the house to Nick.

a. Jarrod may no longer accept the offer because Patrick changed his position.
b. Jarrod still may accept the offer because Patrick’s offer was irrevocable for 30 days.
c. Jarrod still may accept the offer because his telephone conversation did not constitutea rejection and the option period has not expired.
d. Jarrod still may accept the offer because a rejection never terminates the power of acceptance in an option contract.

Answers

Answer:

a. Jarrod may no longer accept the offer because Patrick changed his position.

Explanation:

A contract is formed when there is an offer by the offerer and an acceptance by the recipient. However the offered has the right to revoke the offer at any time during the offer period, then the recipient will not be able to accept it.

In the given scenario Patrick offered to sell his house to Jarrod for $50,000. Jarrod was interested but did not wish to decide immediately so he asked Patrick if he would hold the offer open for thirty days.

So Jarrod had not accepted to offer.

Patrick has the right to revoke the offer and sell to someone else.

However Jarrod will be entitled to his 50 dollars back.

If contracting parties attach materially different meanings to a contract word or term subject to more than one reasonable interpretation, the contract is void. a. True b. False

Answers

Answer:

True

Explanation:

A contract is a professional document with the set of guidelines and regulations for a business when there is a partnership between two or more people, and that should be a parameter instrument for the effectiveness of a business and compliance with the current legislation.

Every contract must be drafted in a clear and objective manner, with equal rights and obligations for all members and in such a way as not to give scope for different interpretations or clauses that benefit someone. Therefore, it is correct to state that if the contracting parties assign different meanings to words or a contractual term that gives rise to more than one interpretation, the contract will be void.

the preferred stock of BGE, inc. is sold at $37 and pays a divident of $5. And the net price of the secuirty after issurancee costs is estimated to be $32.93 what is the cost of preferred stock for BGE? g

Answers

Answer:

15.18%

Explanation:

Cost of preferred stock = Annual dividend/Net Proceeds

Cost of preferred stock = $5 / $32.93

Cost of preferred stock = 0.1518372305

Cost of preferred stock = 15.18%

So, the cost of preferred stock for BGE is 15.18%.

Terps Corp.'s balance sheet accounts as of December 31, 2021 and 2020 and information relating to 2021 activities are presented below. December 31, 2021 2020 Assets Cash $ 440,000 $ 200,000 Short-term investments 600,000 — Accounts receivable (net) 1,020,000 1,020,000 Inventory 1,380,000 1,200,000 Long-term investments 400,000 600,000 Plant assets 3,400,000 2,000,000 Accumulated depreciation (900,000) (900,000) Patent 180,000 200,000 Total assets $6,520,000 $4,320,000 Liabilities and Stockholders' Equity Accounts payable and accrued liabilities $1,660,000 $1,440,000 Notes payable (nontrade) 580,000 — Common stock, $10 par 1,600,000 1,400,000 Additional paid-in capital 800,000 500,000 Retained earnings 1,880,000 980,000 Total liabilities and stockholders' equity $6,520,000 $4,320,000 Information relating to 2021 activities: Net income for 2021 was $1,500,000. Cash dividends of $600,000 were declared and paid in 2021. Equipment costing $1,000,000 and having a carrying amount of $320,000 was sold in 2021 for $360,000. A long-term investment was sold in 2021 for $320,000. There were no other transactions affecting long-term investments in 2021. 20,000 shares of common stock were issued in 2021 for $25 a share. Short-term investments consist of treasury bills maturing on 6/30/22. Net cash provided by 2021 financing activities was

Answers

Answer:

$480,000

Explanation:

              Cash-flow from Financing Activities

Particulars                                                                Amount

Due to change in notes payable                          $580,000

Due to change in common stock                          $500,000 (20000*$25)

Payment of common dividends                            ($600,000)

Net cash provided by financing activities           $480,000

Do you think that some people have difficulty talking to others face-to-face because of how prevalent texting is today? When you have an issue that you need to discuss with someone, do you prefer to sit down and talk it out, handle it through texting or social media, or some other form of written communication? Write your response to the following questions in a 5-7 sentence paragraph below (Please help asap)​

Answers

Answer: I do think that people have difficulty talking to others face-to-face because of how prevalent texting is today. The reason for that is because we’ve gotten used to having time to think about our answer before sending our message. In general, there’s less pressure with texting than there is with face-to-face. You’re in front of the person you’re talking to and they’re able to monitor you closely, which could make some people uncomfortable and unable to think of anything to say. Another reason is because texting is able to be done without moving. It’s more convenient than meeting up with someone to discuss something.

Penny Arcades, Inc., is trying to decide between the following two alternatives to finance its new $28 million gaming center: a. Issue $28 million of 6% bonds at face amount. b. Issue 1 million shares of common stock for $28 per share. 2. Which alternative results in the highest earnings per share

Answers

Answer:

Penny Arcades, |nc.

a. Issue $28 million of 6% bonds at face amount.

Explanation:

Alternative A will surely result in higher earnings per share than Alternative B.  It has been established that some financial leverage enables the stockholders to earn more per share.  This is not a debatable issue.  The hard work lies with the corporation's ability to find the debtholders that can finance its activities and assets.  This means that the stockholders of Penny Arcades, Inc. will be at a much more financial advantage if they can find creditors to lend it the $28 million for the gaming center than making the finance available themselves.

Sheryls's business sells a single product. The following information was gathered from Sheryls's records: Price $97.00 per unit Variable costs are 67% of sales price The company's fixed costs are $400,000 annually Current sales total is 16,000 units Target profit before tax $33,000 Budgeted sales total is 15,000 units How many units does Sheryls's business need to sell to break even

Answers

Answer:

12,497 units

Explanation:

Break even unit = Fixed Cost ÷ Contribution per unit

                           = $400,000 ÷ $97.00 x 33%

                           = 12,497 units

Sheryls's business need to sell  12,497 units to break even

Assume that, on January 1, 2021, Matsui Co. paid $2,958,000 for its investment in 87,000 shares of Yankee Inc. Further, assume that Yankee has 290,000 total shares of stock issued. The book value and fair value of Yankee's identifiable net assets were both $580,000 at January 1, 2021. The following information pertains to Yankee during 2021:

Net income $290,000
Dividends declared and paid $87,000
Market price of common stock on 12/31/2021 $36 /share

Required:
What amount would Matsui report in its year-end 2021 balance sheet for its investment in Yankee?

Answers

Answer: $3,018,900

Explanation:

Amount to report is:

= Cost of investment + Share of Net income - Share of dividends

Share of Net income

= Percentage ownership * Net income

= 87,000 shares / 290,000 * 290,000

= $87,000

Share of Dividends

= 87,000 / 290,000 * 87,000

= $26,100

Amount to report:

= 2,958,000 + 87,000 - 26,100

= $3,018,900

why do conduction band electrons posses very high energy's.h​

Answers

Just because of band gap. The forbidden energy gap keeps the conduction band at high energy by an amount to equal to band gap energy from the valence band edge. If you compare energies of electrons present in conduction band and valence band, they significantly differ by an amount equal to band gap energy. The low energy electron presents in a valence band requires an energy equal to band gap energy to excite to conduction band. Consequently, the electrons present in conduction band possess high energy compared to electrons present in valence band. At absolute zero K, the low energy states present in valence band are usually completely occupied where as the high energy states present in the conduction band are unoccupied.

Capital budgeting is the process of making capital expenditure decisions. used in sell or process further decisions. of determining how much capital stock to issue. of eliminating unprofitable product lines.

Answers

Answer:

The correct answer is the first option: of making capital expenditure decisions.

Explanation:

To begin with, the term known as "Capital Budgeting", in the field of business management, refers to the method a company's manager use in order to see how profitable it is to start some new inversions or projects, therefore that the main purpose of this process is to involve the elaboration of a budget that will help the superiors of the organization to make capital expenditure decisions when they are looking for a new inversion or project to start with. It is very helpful in the situations where there is a need for evaluation of future prospects.

market:blue Jean market . event :the dye in blue jeans is proven not fade easily .Name the market​

Answers

DontBuyFromUs

In 2019, Henry Jones (Social Security number 123-45-6789) works as a freelance driver, finding customers using various platforms like Uber and Grubhub. He is single and has no other sources of income. In 2019, Henry's qualified business income from driving is $61,200. Assume Henry takes the standard deduction of $12,200. Click here to access the 2019 individual tax rate schedule to use for this problem. Assume the QBI amount is net of the self-employment tax deduction.

Required:
a. Compute Henrys QBI deduction and his tax liability for 2019.
b. Complete Henry's 2019 Form 8995 (Qualified Business Income Deduction Simplified Computation).

Answers

Answer:

a.    QBI Deduction = $9,800

      Tax liability = $4,510

Explanation:

a. The BI deduction in 2019 was 20% of the qualified business income in excess of the standard deduction:

QBI deduction = (61,200 - 12,200) * 20%

= $9,800

We then use this to find the taxable income:

= Qualified business income - standard deduction - QBI deduction

= 61,200 - 12,200 - 9,800

= $39,200

Tax liability for a single person in 2019 as shown by the attached file is:

= 970 + 12% * (39,200 - 9,700)

= 970 + 3,540

= $4,510

b. Form not attached but the main item should be the taxable income which is calculated above.

Phishing:_______
a) A con executed using technology, typically targeted at acquiring sensitive information, or tricking someone into installing malicious software.
b) A term that, depending upon the context, may be applied to either, 1) someone who breaks into a computer system, or 2) a particularly clever solution.
c) When someone uncovers computer weaknesses, without exploiting them.
d) When a protester seeks to make a political point by leveraging technology tools, often via system integration, defacement, or damage.

Answers

Answer:

a)

Explanation:

Phishing is a type of deception in which an intruder disguises himself in email or other means of communication as a reputable individual or person. Attackers would normally use phishing e-mails to spread a range of malicious links or attachments. Some people will gather login credentials or victims' account details.

So as per above definition only option A seems the correct alternative among al the other option when discussing about Phishing.

A con executed using technology, typically targeted at acquiring sensitive information, or tricking someone into installing malicious software.

Whitney Company had no units in process at the beginning of the month. During the month 8,000 new units were started, 6,000 of these were completed but 2,000 were still in process at the end of the month. The units still in process were 100% complete as to materials but only 30% complete as to conversion costs. The cost of materials used in production during the month was $20,800 and the costs of labor and overhead were $30,360. If Whitney Company uses process costing, the total cost of making a unit of product during this month rounded to the nearest cent is:

Answers

Answer:

$7.20

Explanation:

                        Units  % Mat.  EUP- Mat.  % Conv.   EUP- Conv.

Units completed &               6000    100%     6000         100%        6000

transferred out

Units in ending inventory    2000    100%     2000         30%          600

Equivalent units of production                     8000                           6600

Cost per Equivalent Unit of Production      

                                                         Materials    Conversion      Total

Beginning costs             -                       -                 -

During the month costs                   $20,800       $30,360

Total cost                                          $20,800        $30,360

÷ Equivalent units of production      8.000             6,600

Cost per equivalent unit                 $2.60             $4.60           $7.20

of production

In a closed economy, saving and investment must be equal, but this is not the case in an open economy. In the following problem, you will explore how saving and investment are connected to the international flow of capital and goods in an economy. Before delving into the relationship between these various components of an economy, you will be asked to recall some relationships between aggregate variables that will be useful in your analysis.

Recall the components that makeup GDP. National income (Y) equals total expenditure on the economy's output of goods and services. Thus, where C= consumption, I= investment, G =government purchases, X=exports, M =imports, and NX= net exports.
Y= _____

Also, national saving is the income of the nation that is left after paying for _____. Therefore, national saving (S) equals:
S=_____

Rearranging the previous equation and solving for Y yields, Y= _____ Plugging this into the original equation showing the various components of GDP results in the following relationship:
S=_____

Answers

Answer:

Y = C + I + G + NX

S = Y - C

S = I + G + NX

Explanation:

National Income Y = C + I + G + NX ; {where consumption, investment, government purchases, net exports ie exports - imports are corresponding expenditure of households, firms, government, rest of the world}

National Saving (S) is income (Y) left after paying for consumption (C) . So, S = Y - C

Using above equations, Y = C + S , Y = C + I + G + NX

C + S = C + I + G + NX

So, S = I + G + NX

Please help with the following question.

Answers

Answer:i dont really know

Explanation:

A not-for-profit firm uses a small convenience sample to gather data on customer reactions. It invites a small group of customers for lunch and asks them to share what they think about the products they have purchased from the firm. This is an example of ___

Answers

Answer:

informal surveys

Explanation:

From the question we are informed about A not-for-profit firm which uses a small convenience sample to gather data on customer reactions. It invites a small group of customers for lunch and asks them to share what they think about the products they have purchased from the firm. In this case, this is an example of informal surveys.

Informal surveys can be regarded as type of survey whereby there is conduction of interviews as well as making of field observations by researchers themselves, instead of

enumerators as regards formal survey.

distinguishing characteristics of formal survey is that direct nteraction will exist in between the farmer as well as the

interdisciplinary team of researchers.

A productive process approachviews operations as a separate organizational function.must provide feedback information for control of process inputs and technology.is of limited use in service organizations.disregards human and social concerns.

Answers

Answer:

The correct answer is the second option: Must provide feedback information for control of process inputs and technology.

Explanation:

To begin with, the term known as " Productive process approach" in the field of business management is refered to the method used by the companies who seeks for the constant improvement of its daily operations inside the organization. Therefore that it is necessary to say that this approach must provide feedback information of the internal processes that happen in the business regarding the inpunts and the technology used by the place so that a regular control will take place and with that every little adjustment as well in order to get better at every possible way to produce the company's product.

Perform a horizontal analysis providing both the amount and percentage change. (Round Percentage answers to 1 decimal place. Decreases should be indicated by a minus sign.)

Year
2021 2020
Cash $322,960 $880,000
Accounts receivable 702,240 280,000
Inventory 897,780 780,000
Long-term assets 3,536,680 2,380,000
Total assets $5,459,660 $4,320,000

Answers

Answer:

Find attached

Explanation:

Horizontal or trend analysis involves is a financial statement analysis technique that shows the percentage change or dollar change in a corresponding financial statement's item.

For example, the change in the fixed assets by a way of increase or decrease compared to last year's financial statements.

Formula:

change in a particular line item=(current year amount/previous year)-1

Suppose the Digby company shifts focus to only competing in the Thrift and Nano segments, while competing on price by reducing costs and passing the savings to the customers, what strategy would they be implementing

Answers

Answer:

Niche cost leader strategy

Explanation:

In simple words, A niche cost pioneer or leader aims to exploit consumer markets that are price responsive. Its objective is to undercut all rivals' costs while remaining sustainable. Under this business strategy, the producer try to create a strong customer base by offering lower prices as it is the best motivation for the customer to try a specific product.

Thus, from the above we can conclude that the correct answer is niche cost leader.

How do I solve this? It’s a real estate question.

Answers

A.2.2 points(the answer)(you’re welcome)

A manufacturing company had a balance in Finished Goods inventory of $200,000 on 12/31/2011. During 2012, the company transferred $1,000,000 of costs from Work in Process to Finished Goods. A count of inventory at the end of the year revealed a balance in Finished Goods of $400,000 at 12/31/2012. What was Cost of Goods Sold during 2012

Answers

Answer:

the cost of goods sold during the year 2012 is $800,000

Explanation:

The computation of the cost of goods sold is shown below;

Costs of Goods Sold during 2012 is

= Transferred from Work in Process + Beginning Inventory - Ending Inventory

= $1,000,000 + $200,000 - $400,000

= $800,000

Hence, the cost of goods sold during the year 2012 is $800,000

Journalize the following transactions, using the allowance method of accounting for uncollectible receivables
Mar. 17: Received $2,700 from Keith MacPhearson and wrote off the remainder owed of $6,370 as uncollectible.
Mar. 17 July 29: Reinstated the account of Keith MacPhearson and received $6,370 cash in full payment.

Answers

Answer:

                                 Journal entry

Date Account & Explanation                     Debit      Credit

Mar 17.    Cash                                                 $2,700

               Allowance for doubtful accounts   $6370  

                        Account receivable                                $9,070

Jul 29     Account receivable                         $6,370

                        Allowance for doubtful accounts           $6,370

              (To record amount reinstated)

               Cash                                                 $6,370

                         Account receivable                                 $6,370

              (To record amount received)

Austin Corporation, a U.S. corporation, received the following investment income during the current year: $50,000 of dividend income from ownership of stock in a French corporation, $20,000 interest on a loan to its Dutch subsidiary, $40,000 royalty from its 50 percent owned Irish venture, and $30,000 capital gain from sale of its stock in a Brazilian corporation. How much of Austin's income is treated as foreign source

Answers

Answer:

Austin's income is treated as a foreign source    $110,000

Explanation:

The computation of the amount of income treated as the foreign source is given below;

Dividend income arise from the ownership of stock in a French corporation        $50,000

Add: Interest on a loan to its Dutch subsidiary      $20,000

Add: Royalty from its 50 percent owned Irish venture $40,000

Austin's income is treated as a foreign source    $110,000

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