During the Current Year, Pearlene Monroig Earns Business Income in the U.K

Multiple Choice

During the current year, Pearlene Monroig earns business income in the U.K. of €10,000 from which the British government withholds €2,000. Assume that the relevant exchange rate was €1.00 = $1.70 for the year. Which of the following statements is correct?

A) Pearlene will have foreign source net business income of $13,600 and a credit against Tax Payable of $3,400.
B) Pearlene will have foreign source net business income of $17,000 and no credit against Tax Payable.
C) Pearlene will have foreign source net business income of $16,150 and a credit against Tax Payable of $2,550.
D) Pearlene will have foreign source net business income of $17,000 and a credit against Tax Payable of $3,400.