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If a US parent is shipping inventory to its Chinese subsidiary at an arbitrarily high transfer price,

a. the US parent will show a lower pre-tax profit

b. the Chinese government will collect relatively higher income taxes

c. the US government will collect relatively high import tariffs

d. the Chinese subsidiary will show relatively lower profits

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M942233

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