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amid [387]
3 years ago
7

Mustard Corporation (a C corporation) owns 15% of the stock of Burgundy Corporation (a C corporation), which pays an annual divi

dend to its shareholders. Mustard is considering the purchase of additional shares of Burgundy stock. Would this stock purchase affect the amount of dividends received deduction that Mustard can claim
Business
1 answer:
irina1246 [14]3 years ago
4 0

Answer:

Yes, it will affect it.

Explanation:

The dividends received deduction (DRD) refers to a US federal tax law that allows some corporation that are paid dividend by related entities to deduct  certain percentage of the dividend received from their income tax depending on their percentage of ownership of the related entity that paid the dividend.

The three criteria or tiers that determines how much to deduct as DRD are as follows:

1. Generally, the DRD a corporation is qualified for is 70% of the dividend received.

2. A DRD equals to 80% of the dividend received can be deducted if the corporation holds more than 20% but less than 80% shareholding of the company that paid the dividend.

3. If the corporation holds more than 80% shareholding of the company that paid the dividend, a DRD of 100% of the dividend applies.

Therefore, additional stock purchase will affect the amount of dividends received deduction that Mustard can claim.

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Hutter Corporation declared a $0.50 per share cash dividend on its common shares. The company has 31,000 shares authorized, 15,6
notsponge [240]

Answer:

Dr Retained earnings  $6,200

Cr Dividends payable               $6,200

Explanation:

The shares entitled to dividends payment are those outstanding as at when dividends were declared,that is those shares in issue as at the date of dividend declaration,in essence only the outstanding shares of  12,400 are entitled to dividend payment of $0.50 per share.

The amount of dividend payment=$0.50*12,400=$6,200

The total dividends declared of $6,200 would be debited to retained earnings and credited to dividends payable until the payment date when the cash would be settled.

7 0
3 years ago
An income statement under absorption costing includes which of the following: ______________
ra1l [238]

Answer:

a. Direct materials

b. Direct labor

c. Variable overhead

d. Fixed overhead

Explanation:

The absorption costing is the costing in which the income statement should includes all types of production cost i.e. direct material cost, direct labor cost, variable overhead and the fixed overhead

So as per the given statement, all the four types of costing should be involved while preparing the income statement under the absorption costing

Hence, all 4 options should be considered

4 0
3 years ago
If you spend $400 on a new phone and it
Anvisha [2.4K]

Answer:

who knows??

Explanation:

bla bla bla ballalalallalalallalalal

7 0
2 years ago
Assume that banks hold no excess reserves and that all currency is deposited into the banking system. If the required reserve ra
GrogVix [38]

Answer:

2.75 million

Explanation:

Required reserves is the percentage of deposits required of banks to keep as reserves by the central bank

Required reserves = reserve requirement x deposits

Increase in value of money supply as a result of the purchase is determined by the money multiplier

Money multiplier = 1 / reserve requirement

1/0.05 = 20

increase in money supply = amount of open market purchase / reserve requirement

55  / 20 = 2.75 million

3 0
2 years ago
During your research, you also come across a Web site that lists many health benefits of vegetarian eating and provides a list o
kompoz [17]
Here is your answer:

Your answer is A to provide clear, balanced, and unbiased information about the topic.

Reason: When people make websites its important to have certified information so the users or people who are using the website will have verified (correct) information to use for school projects, research papers, etc...

Your answer is A.


(btw it would help to have letters on your options)
4 0
3 years ago
Read 2 more answers
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