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alekssr [168]
3 years ago
8

Tracy and Lance, equal shareholders in Macaw Corporation, receive $600,000 each in distributions on December 31 of the current y

ear. Macaw’s current year taxable income is $1 million and it has no accumulated E & P. Last year, Macaw sold an appreciated asset for $1,200,000 (basis of $400,000). Payment for one-half of the sale of the asset was made this year. How much of Tracy’s distribution will be taxed as a dividend?A. $0B. $300,000C. $500,000D. $600,000E. None of the above
Business
1 answer:
Lorico [155]3 years ago
6 0

Answer:

B. $300,000

Explanation:

Macaw Corporation increased its E & P last year for the entire amount of the deferred gain on the installment sale. Since one-half of the $800,000 gain is included in taxable income in the current year, taxable income should be reduced by this amount to determine current E & P. Therefore, Macaw Corporation’s current year E & P is $600,000 ($1 million taxable income – $400,000 of installment sale gain). Because one-half of the current E & P is allocated to Tracy’s distribution, she has a $300,000 dividend

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Answer:

c) A government insurance program that will pay back account holders if the bank or lending institution fails

Explanation:

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FDIC is a government insurance program that will pay back account holders if the bank or lending institution fails.

The income generated from the premium payments of insured banks is used to fund or finance the FDIC.

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3 years ago
Read 2 more answers
Question 2 Which of the following are wholesale and which are retail? (a)Large-scale deposits made by firms at negotiated rates
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Answer:

Wholesale banking refers to banking services sold to large clients, such as other banks, other financial institutions, government agencies, large corporations, and real estate developers. It is the opposite of retail banking, which focuses on individual clients and small businesses. Wholesale banking services include currency conversion, working capital financing, large trade transactions, mergers and acquisitions, consultancy, and underwriting, among other services

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2 years ago
Shelly's company produces computers, phones, and tablets. About six months ago, Shelly began to keep track of number of hours wo
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3 years ago
Wilton sells softball equipment. On November 14, they shipped $3,000 worth of softball uniforms to Paola Middle School, terms 2/
iogann1982 [59]

Answer:

The $2,700 is the amount which recognized as net accounts receivable on the balance sheet as of November 30

Explanation:

 The computation of net accounts receivable is shown below:

= Selling price of softball equipment - defective merchandise amount  

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3 years ago
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nominal interest rate

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Titan State Bank offer of 6% interest is a quoted interest rate. A quoted interest rate is also annual payable rate (APR)  and in this case, it is compounded quarterly. Additionally, since this quoted rate does not take into account the inflation rate, it is referred as a Nominal interest rate. However, when that nominal rate of 6% is adjusted for inflation, the rate you earn is the Real interest rate which you calculate using the Fisher equation.

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