参考号：EM134130

Question :

Pursco是domestic corporation that distributes technical equipment worldwide. During the existing year, Pursco had $100 million of sales, a gross profit of $40 million, and incurred $30 million of selling, administrative and general expenses (SG&A), for taxable income of $10 million. Pursco's sales add $20 million of sales to foreign customers. The gross profit on these overseas sales was $10 million. Pursco transferred title abroad on all foreign sales, and thus the entire $10 million is classified as foreign-source income. A time management survey was currently completed, and indicates that employees devote 90 percent of their time to the company's domestic operations and 10 percent to foreign operations. Compensation expenses account for $20 million of the $30 million of net SG&A expenses. Consider Pursco's $10 million of taxable income is subject to U.S. tax at a 35 percent rate.

根据随后的独立假设评估Pursco的外国税收限制。

Pursco evaluates the amount of SG&A expenses allocable to foreign-source income using time as an apportionment base for the compensation component of SG and A, and gross sales as an apportionment base for the all other SG and A expenses.