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Katarina [22]
3 years ago
5

Matulis, Inc., a calendar year C corporation, owns a single asset with a basis of $325,000 and a fair market value of $800,000.

Matulis holds a positive E & P balance. The entity elects S corporation status for 2020 and then sells the asset. Compute the corporate-level bt1ilt-in gains tax that mt1st be paid by Matulis.
Business
1 answer:
Talja [164]3 years ago
3 0

Answer:

$99,750

Explanation:

Matulis's taxes are = (asset's fair market value - asset's basis) x corporate tax rate = ($800,000 - $325,000) x 21% = $475,000 x 21% = $99,750

Since the C corporation is turning into a S corporation it must recognize the gain on holding the asset. The Tax Cuts and Jobs Act set the corporate tax rate at 21%.

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Cobe Company has already manufactured 21,000 units of Product A at a cost of $15 per unit. The 21,000 units can be sold at this
bezimeni [28]

Answer and Explanation:

The computation is shown below;

Particulars                   Sell     process further  

sales                       $450,000      $1,209,000  

Relevant cost    

Process further cost $0               $290,000

Less: Total relevant cost  $0      $290,000  

Income                     $450,000      $629,000

Incremental income                          $179,000

The $1,372,000 is come from

= 5,800 units × $105 + 12,000 units × $50

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= $1,209,000

Hence, the company should process further

7 0
2 years ago
A family wishes to save for future college expenses. Which financial tool should the family invest in?
emmainna [20.7K]

Answer:

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Explanation:

A 529 plan is a tax-advantaged savings plan designed to encourage saving for future education costs.

8 0
3 years ago
Describe the nature and types of businesses. ​
const2013 [10]

Answer:

The nature of business is a statement about a company's offering to its clients, its industry, legal structure, or any other distinctive qualities of the business. For example, if you say a company in the “private sector”, you evaluate the nature of the company based on its nature to earn profits.

Explanation:

Hope This Helps,

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8 0
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Bess [88]
<span>This liability is called the insurer's "loss reserve".</span>

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