A Japanese branch of a U.S. corporation paid $4,200,000 in taxes to the government of Japan
on income it generated there. The corporation is subject to a 35% tax rate in the U.S.
How much tax will be owed to the U.S. government on the $10,000,000 of Japanese branch
income?
A) $4,200,000
B) $3,500,000
C) $0
D) $7,000,000
(which one is correct with steps please)

Answers

Answer 1

The tax that will be owed to the U.S. government on the $10,000,000 of Japanese branch income is B. $3,500,000

How to calculate the value

To calculate the tax owed to the U.S. government on the Japanese branch income, we need to determine the taxable income and apply the appropriate tax rate. The taxable income is the income generated by the Japanese branch, which is $10,000,000.

The tax rate in the U.S. for this corporation is 35%. Therefore, the tax owed to the U.S. government can be calculated as follows:

Tax owed to the U.S. government = Taxable income * U.S. tax rate

= $10,000,000 * 35%

= $3,500,000

Therefore, the correct answer is B) $3,500,000.

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