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Paha777 [63]
3 years ago
15

Wally and Sally want to go into business together and plan on offering a tutoring service to high school and college students. W

ally proposes that they share control of the business and split profits equally and not bother with a written agreement. Sally, however, is concerned about being able to pay their debts because they will have to rent tutoring space and purchase computers and supplies. She is also concerned about parents and students who may sue if the students' test scores do not improve. She tells Wally that she just bought a new boat and car, and that she does not want her assets to be in jeopardy. She tells Wally that they should form a corporation to shield their personal assets. Wally, however, says their personal assets are not in danger with his proposal because they are a business and that, furthermore, forming a corporation would likely result in double taxation. Is Wally correct that forming a corporation would likely result in double taxation?
(A) Yes, because the corporation would be required to pay tax on its profits, and the shareholders would also be required to pay taxes on dividends.
(B) No, Wally is incorrect because all businesses are taxed in the same manner.
(C) No, Wally is incorrect but only because the law involving taxation of corporations does not apply until there are at least 10 shareholders.
(D No, Wally is incorrect but only because the law involving taxation of corporations does not apply until there are at least 75 shareholders.
(E) Yes, Wally is correct but only because his proposal does not involve a writing and the filing of paperwork with the secretary of their state.
Business
1 answer:
sashaice [31]3 years ago
4 0

Answer:

A. Yes, because the corporation would be required to pay tax on its profits, and the shareholders would also be required to pay taxes on dividends

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The Baldwin Company currently has the following balances on their balance sheet: Total Assets $260,881 Total Liabilities $150,67
bonufazy [111]

Answer:

common stock = $80,308

Explanation:

assets = liabilities + equity

current balance:

$260,881 = $150,673 + $110,208

$110,208 = common stock + retained earnings = $57,508 + $52,700

next year:

net income = $44,200

dividends = $12,000

assets = $260,881 + $55,000 = $315,881

liabilities = $150,673

equity = $315,881 - $150,673 = $165,208

retained earnings = $52,700 + $44,200 - $12,000 = $84,900

common stock = $165,208 - $84,900 = $80,308

7 0
3 years ago
The master budget of Marigold Corp. shows that the planned activity level for next year is expected to be 50000 machine hours. A
Reptile [31]

Answer:

The correct answer is A.

Explanation:

<u>First, we need to separate the fixed costs and calculate the unitary variable costs:</u>

<u></u>

Fixed costs:

Depreciation on factory building= 70,000

Total unitary varaible cost:

Total cost= 800,000 + 250,000 + 250,000= $1,300,000

Unitary cost per hour= 1,300,000 / 50,000= $26

<u>Now, the total cost for 60,000 hours:</u>

Total cost= 26*60,000 + 70,000

Total cost= $1,630,000

7 0
3 years ago
On March 31, 2018, Easy Rental Agency Inc.'s trial balance included the following selected unadjusted account balances. The comp
AVprozaik [17]

Answer:

1)

Dr Depreciation expense 1,226

    Cr Accumulated depreciation 1,226

2)

Dr Unearned revenue 6,487

    Cr Rent revenue 6,487

3)

Dr Interest expense 600

    Cr Accrued interest 600

4)

Dr Supplies expense 1,960

    Cr Supplies 1,960

5)

Dr Insurance expense 3,618

    Cr Prepaid insurance 3,618

6)

Dr Income tax expense 2,600

    Cr Income tax payable 2,600

Explanation:

March 31, 2018

Prepaid insurance $14,740  - 3,618

Supplies 2,900  - 1,960

Equipment 22,100

Accumulated depreciation-equipment 5,680  + 1,226

Unearned revenue 9,730  - 6,487

interest payable 600

Income tax payable 2,600

Loan payable, due 2020 20,000

Rent revenue 30,900  + 6,487

Salaries expense 14,500

depreciation expense 1,226

interest expense 600

Supplies expense 1,960

Insurance expense 3,618

Income tax expense 2,600

1. The equipment, which was purchased on January 1, 2017, is estimated to have a useful life of four years. The company uses straight-line depreciation.

depreciation per year = $22,100 / 4 = $5,525

depreciation expense up to March 31, 2018:

$5,525 x 1.25 = $6,906.25 ≈ $6,906

adjustment entry = $6,906 - $5,680 = $1,226

Dr Depreciation expense 1,226

    Cr Accumulated depreciation 1,226

2. One third of the unearned revenue related to rent is still unearned at the end of the quarter.

adjusting entry = 9,730  - (9,730  x 1/3) = $6,486.67 ≈ $6,487

Dr Unearned revenue 6,487

    Cr Rent revenue 6,487

3. The loan payable has an interest rate of 6%. Interest is paid on the first day of each following month and was last paid March 1, 2018.

interest per month = $20,000 x 6% x 1/12 = $600

Dr Interest expense 600

    Cr Accrued interest 600

4. Supplies on hand total $940 at March 31.

adjusting entry = $2,900 - $940 = $1,960

Dr Supplies expense 1,960

    Cr Supplies 1,960

5. The one-year insurance policy was purchased for $14,740 on January 1.

insurance expense per quarter = $14,470 x 3/12 = $3,617.50 ≈ $3,618

Dr Insurance expense 3,618

    Cr Prepaid insurance 3,618

6. Income tax is estimated to be $2,600 for the quarter.

Prepare the quarterly adjusting entries required at March 31.

Dr Income tax expense 2,600

    Cr Income tax payable 2,600

8 0
3 years ago
Which organization does not work for consumers
Dvinal [7]

Answer:

Which organization does not work for consumers

Federal treasury

Explanation:

The other three are consumer-focused.  But the Federal Treasury is a US government agency that advises government on fiscal matters.  It performs some law enforcement activities to help government enforce laws on fiscal policies.  It is also responsible for manufacturing the currency and postage stamps.  Finally, it has responsibility for the supervision of national banks in the United States.

3 0
3 years ago
____________ result(s) from factors such as manufacturing products in very large quantities, buying inputs in bulk, or making mo
Delicious77 [7]

The question is incomplete, it lacks option.

A) Brand loyalty

B) Demographic forces

C) Political forces

D) Brand positioning

E) Economies of scale

Answer:

Economies of scale

Explanation:

Economies of scale can be described as a reduction in cost, this occurs when companies increases the rate of their production.

Economies of scale can also be reffered to as a process whereby an organization becomes more efficient and therefore reduces the costs of their products.

Economies of scale can be greatly influenced by a large amount of capital which is made available to companies to improve their various operations.

4 0
3 years ago
Read 2 more answers
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