Answer:
The correct answer is letter "E": To a large extent, the decision to dissolve a firm through liquidation versus keeping it alive through reorganization depends on a determination of the value of the firm if it is rehabilitated versus the value of its assets if they are sold off individually.
Explanation:
Liquidation refers to the termination of an enterprise and the transfer of its properties to the creditor or business owners. The liquidation most frequently happens in the context of a bankruptcy. A bankruptcy trustee must sell the company properties to the creditors and split the proceeds.
<em>The decision of keeping a business against liquidating it will depend on the comparison between the value of continuing operating which relies on the current value the firm has in the market against the value of the individual assets the firm has. Whichever greater will determine if the business will remain open or if it will be closed.</em>
A company is a legal entity formed by a group of individuals to engage in and operate a business commercial or industrial enterprise. A company may be organized in various ways for tax and financial liability purposes depending on the corporate law of its jurisdiction.
Present Yearly Net operating income (loss)
(Units * CM Per unit)-Fixed cost
Units Sales 415000|
[Selling Price Per Unit 70
\Variabel Expense Per unit 40|
Fixed Expenses 540000]
Compute the CM ratio
Selling Price Per Unit 70.00
Variable Expense Per unit 40.00
Contribution Margin per unit ( Selling Price - Variable Cost) 30.00
Ico Ratio =( CM/Selling Price) 42.857%
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Answer:
Income = $8,200
Less:
Federal tax 10% = -$820
State tax at 5.5% = -$451
FICA at 7.65% = -$627.30
Total deduction = -$1,898.30
Net pay = $6,301.70
