A multinational Corporation based in the United States of America has subsidiaries in the UK, Canada, and France. As at December 31, 2020, inter-company indebtedness were as follows: Debtors Creditors Amount Currency UK Canada 1,500,000 Can$ UK France 600,000 Euro (€) France Canada 800,000 Can$ Canada UK 94,000 Sterling (£) Canada France 400,000 Euro (€) It is the policy company’s policy to net off inter-company balances to the greatest extent possible. The central treasury department is to use the following exchange rates for these purposes: US$1 =Can$1.237/€0.8620/£0.729 Required: Calculate the net payment to be made between the subsidiaries after netting off inter-company balances, by presenting the payoff in a matrix/table format.

A multinational Corporation based in the United States of America has subsidiaries in the UK, Canada, and France. As at December 31, 2020, inter-company indebtedness were as follows: Debtors Creditors Amount Currency UK Canada 1,500,000 Can$ UK France 600,000 Euro (€) France Canada 800,000 Can$ Canada UK 94,000 Sterling (£) Canada France 400,000 Euro (€) It is the policy company’s policy to net off inter-company balances to the greatest extent possible. The central treasury department is to use the following exchange rates for these purposes: US$1 =Can$1.237/€0.8620/£0.729 Required: Calculate the net payment to be made between the subsidiaries after netting off inter-company balances, by presenting the payoff in a matrix/table format.

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter9: Taxation Of International Transactions

Section: Chapter Questions

Problem 27P

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Nexus Tech Industries' Consolidate Earnings. Nexus Tech is a U.S.-based multinational manufacturing firm with wholly-owned subsidiaries in Brazil, Germany, and China, in addition to domestic operations in the United States. NexusTech is traded on the NASDAQ. NexusTech currently has 650,000 shares outstanding. The basic operating characteristics of the various business units is as follows: Nexus Tech must pay corporate income tax in each country in which it currently has operations. a. After deducting taxes in each country, what are Nexus Tech's consolidated earnings and consolidated earnings per share in U.S. dollars? b. What proportion of Nexus Tech's consolidated earnings arise from each individual country? c. What proportion of Nexus Tech's consolidated earnings arise from outside the United States?
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! Required information Newberry, Inc., whose reporting currency is the U.S. dollar ($), has a subsidiary in Argentina, whose functional currency also is the $. The subsidiary acquires inventory on credit on November 1, 2017, for 210,000 pesos that is sold on January 17, 2018, for 243,000 pesos. The subsidiary pays for the inventory on January 31, 2018. Currency exchange rates are as follows: $0.54 =1 peso November 1, 2017 December 31, 2017 0.55 =1 January 17, 2018 January 31, 2018 0.56 =1 0.57 =1
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