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  3. transcom, an ohio corporation, earned $700,000 u.s

Transcom, an Ohio corporation, earned $700,000 U.S. source income from sales of goods to U.S....

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Accounting

Transcom, an Ohio corporation, earned $700,000 U.S. source income from sales of goods to U.S. customers and $330,000 foreign source income from sales of goods to customers in Canada. Canadas corporate income tax rate is 15 percent, and the United States and Canada have a bilateral tax treaty.

Required:

  1. Compute Transcoms U.S. tax if it does not maintain a permanent establishment in Canada. Assume the foreign source income does not qualify as FDII.
  2. Compute Transcoms U.S. tax if it does maintain a permanent establishment in Canada.
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