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Paton Corporation, a U.S. corporation, owns 100 percent of the stock of Tappan Ltd, a British...

Paton Corporation, a U.S. corporation, owns 100 percent of the stock of Tappan Ltd, a British corporation, and 100 percent of the stock of Monroe N.V., a Dutch corporation. Monroe has post-1986 undistributed earnings of €726 and post-1986 foreign income taxes of $484. Tappan has post-1986 undistributed earnings of £968 and post-1986 foreign income taxes of $242. During the current year, Tappan paid Paton a dividend of £520, and Monroe paid Paton a dividend of €520. The dividends were exempt from withholding tax under the U.S.-UK and U.S.-Netherlands income tax treaties. The exchange rates are as follows: €1:$1.50 and £1:$2.00. Assume the U.S. tax rate is 35 percent. (Enter your answers in dollars, with your final answers rounded to the nearest whole dollar amount. Do not round intermediate calculations.)

a. Compute Paton’s deemed paid credit on the dividends it received from Tappan and Monroe.

Monroe Tappen

deemed paid credit

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ekkarill92 answered 1 year ago
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