Problem 1-13 (book/static) Question Help Americo Industries\' Consolidate Earnin

Question

Problem 1-13 (book/static) Question Help Americo Industries' Consolidate Earnings. Americo 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. Americo is traded on the NASDAQ. Americo currently has 650,000 shares outstanding. The basic operating characteristics of the various business units are as follows: (Click on the icon to import the table into a spreadsheet.) Brazilian Germarn Chinese Business PerformanceU.S. Parent (000s) Earnings before taxes (EBT) Corporate income tax rate Subsidiary R$6,250 25% Subsidiary 4,500 40% Subsidiary Y2,500 30% (US$) $4,500 35% Business Performance (000s) Earnings before taxes (local currency) Less corporate income taxes U.S. Parent Company 14706.88 5104.66 Enter any number in the edit fields and then click Check Answer. 2

Explanation / Answer

Earnings before taxes will be $4500 ( it is from the question)

Corporate income tax will be = 4500 * 0.35 = 1575

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