Case 12-2 global electronics company

Global Electronics Company (GEC), a U.S. taxpayers, manufactures laser guitars in its Malaysian genesis (LG-Malay) at a genesis absorb of $120 per ace. LG- Malay guitars are sold to two customers in the United States - Electronic Super-stores (a GEC completely owned subsidary) and Walmart (an unaffiliated customer). The absorb to ecstasy the guitars to the United States is $15 per ace and is paid by LG-Malay. Other Malaysian manufacturers of laser guitars dispose-of to customers in the United States at a markup in entirety absorb (genesis plus ecstasyation) of 40 percent. LG-malay dispose-ofs guitars to Walmart at a landed worth of $180 per ace (LG-Malaypays ecstasyation absorbs). Walmart pays available U.S. significance duties of 20 pecent on its purchases of laser guiatrs. Electronic Superstones to-boot pays significance duties on its purchases from LG-malay. Consistent after a while inductry custom, Walmart places a 50 percent markup on laser guitars and dispose-ofs them at a dispose-of worth of $324 per ace. Electronic Superstones dispose-ofs LG-Malay guitars at a dispose-of worth of $333 per ace.

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