1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
natta225 [31]
3 years ago
7

Ellie and Linda are equal owners in Otter Enterprises, a calendar year business. During the current year, Otter Enterprises has

$320,000 of gross income and $210,000 of operating expenses. In addition, Otter has a long-term capital gain of $15,000 and makes distributions to Ellie and Linda of $25,000 each. Discuss the impact of this information on the taxable income of Otter, Ellie, and Linda if Otter is:
a. A partnership.
b. An S corporation.
c. A C corporation.
Business
1 answer:
ivolga24 [154]3 years ago
7 0

Answer:

a and b

At the level of entity, otter pays no taxes either on the capital gains or on the business income.

Members will pay taxes on the capital gains and on business income.

c

The distribution of $25,000 each will be taxable in the hands of members as it is a dividend income.

Business Income and Capital gain of entity will have no impact for Linda and Ellie on their income tax returns.

Explanation:

a A partnership and b. An S corporation

At the level of entity, otter pays no taxes either on the capital gains or on the business income.

Members will pay taxes on the capital gains and on business income.

Taxable income of each member:

Ellie

Business Income is $55,000

Capital Gain is $7,500

Linda

Business Income is $55,000

Capital Gain is $7,500

Business Income = Gross Income - Operating expense

= $320,000 - $210,000

= $110,000

Note: Distribution of $25,000 will have no impact, as it only decrease their basis in the firm or company.

c. A C corporation

Ottor pays for the business income which amounts to $110,000 as well as the Capital gain of $15,000 at the applicable tax rates.

Members pays taxes only when they receive the distribution which is dividends.

The distribution of $25,000 each will be taxable in the hands of members as it is a dividend income.

Business Income and Capital gain of entity will have no impact for Linda and Ellie on their income tax returns.

You might be interested in
Your body uses minerals for many different jobs, including __________. (select all that apply.)
yan [13]

Your body uses minerals for many different jobs, including building bones

making hormones regulating your heartbeat

Hormones are molecules that are created and released by specific glands to regulate and govern the functioning of particular cells and organs. The term "endocrine glands" refers to these specific glands.

Hormones are chemicals that, as was already mentioned, effectively serve as the body's messengers. Specialized glands called endocrine glands release these substances. Hormones all over the body, these endocrine glands are located. These messengers regulate a variety of physiological processes as well as psychological wellbeing. In preserving the body's homeostasis, they play a significant role.

Protein hormones are soluble in water and made of amino acids. Since the cell membrane is made up of a phospholipid bilayer that prevents any fat-insoluble molecules from diffusing into the cell, peptide hormones cannot flow through it.

Learn more about Hormones here

brainly.com/question/13020697

#SPJ4

7 0
1 year ago
Robert invested in stock and received a positive return over a 9-month period. Which of the following types of returns will be g
Anton [14]

Options:

A) Holding period return (HPR)

B) Effective annual return

C) Annual percentage rate

D) There is not enough information to make a definitive choice.

Answer:

Option B is correct.

Effective annual return

Explanation:

Robert invested in stock and received a positive return over a 9-month period then the effective annual return  will be the greatest.

3 0
2 years ago
Selected financial information for Thornton Company for 2019 follows: Sales $ 2,000,000 Cost of goods sold 1,400,000 Merchandise
frutty [35]

Answer:

7.80 times

Explanation:

First of all we have to calculate the average inventory

Opening inventory= 159,000

Closing inventory= 200,000

Average inventory= (opening inventory+closing inventory)/2

= ( 159,000+200,000)/2

= 359,000/2

= 179,500

The next step is to find the merchandise inventory turnover which is calculated as

= Cost of goods/ Average inventory

Cost of goods= $1,400,000

Average inventory= 179,500

= 1,400,000/179,500

= 7.799 times

= 7.80 times (to 2 decimal places)

Hence the merchandise inventory was turned over 7.80 times in 2019

7 0
3 years ago
Read 2 more answers
Which of the following provides the best explanation for how consumer credit can exacerbate inequality?
Flura [38]

Answer:

people with lower wealth and income may have less access to credit and pay higher interest rates when they are approved

Explanation:

8 0
1 year ago
What are two examples of management information systems?
Anettt [7]

Answer:

process control systems, human resource management systems, sales and marketing systems, inventory control systems, office automation systems, enterprise resource planning systems, accounting and finance systems and management reporting systems.

Explanation:

8 0
2 years ago
Other questions:
  • Greentech is launching a line of miniature solar chargers for laptops, cellphones, and other electronic devices. The chargers ar
    15·1 answer
  • If Korea is capable of producing either shoes for soccer balls or some combination of the two then a. Korea should specialize in
    14·1 answer
  • A cover letter accompanies a résumé to showcase a job-seeker's personal life.<br> True<br> False
    14·1 answer
  • The practical capacity for a particular production facility is best described as Select one: A. the highest level of activity po
    10·1 answer
  • According to Malthus, a fixed quantity of land and a growing human population will eventually produce: a stationary state in whi
    7·2 answers
  • Which of the following organizations is a discrete manufacturer? a. A pharmaceutical company in Arizona that manufactures skin c
    13·1 answer
  • Cash flow from operating activities is increased by: a. depreciation and amortization b. a decrease in accounts receivable c. a
    10·1 answer
  • In 2018, the country of Brazil, had imports of $78.02 billion and had a favorable balance of trade. This means that Brazil had:_
    13·1 answer
  • Wind Fall, a manufacturer of leaf blowers, began operations this year. During this year, the company produced 10,000 leaf blower
    6·1 answer
  • The stockholders’ equity accounts of Cyrus Corporation on January 1, 2017, were as follows. Preferred Stock (7%, $100 par noncum
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!