Answer:
$41,400
Explanation:
Calculation for Paper Clip Company Operating income
OPERATING NET INCOME for Paper Clip Company
Sales revenue 164,800
Less: Purchases of merchandise (89,900)
Utilities for the store (9,600)
Sales commission (10,100)
Rent for store (13,800)
Operating net income $41,400
Therefore the Operating net income will be $41,400
Answer:
Explanation:
From the information povided:
(a) To compute the amount of goodwill paid by Chicago Corporation
Particulars Amount ($)
Accounts Receivable 100000
Inventory 170000
Plant & Equipment 400000
Land 90000
Customer List 4000
Trade Names <u> 16000</u>
NET ASSETS (A) <u>780000</u>
<u />
Current liabilities 76000
Non-current liabilities <u>160000 </u>
NET LIABILITIES (B) <u> 236000</u>
∴
PURCHASE CONSIDERATION (A -B) 544000
<u>Less:</u> Cash Paid <u> 580000</u>
GODWILL <u> 36000 </u>
<u />
b)
In the books of Chicago Corporation, the Journal Entry to record the purchase of Naperville Company.
Account Name Dr. Cr.
Accounts Receivable A/C 100000
Inventory A/C 170000
Plant Equipment A/C 400000
Land A/C 90000
Customer List A/C 4000
Trade Names A/C 16000
Goodwill A/C 36000
Current liabilities A/C 76000
Non-Current Liabilities A/C 160000
Cash A/C 580000
c)
The minimum required amount of goodwill that Chicago can amortize by the end of 2020 is $3600.This is because the amortization can take place for a period of 10 years.
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Answer:
additional income is $11050 if the business is organized as a partnership rather than as a corporation
Explanation:
given data
investors = 10
own = 10%
earn = $500000
corporate tax rate = 34%
personal tax rate = 35 %
to find out
How much additional spendable income
solution
we find here first income if formed as corporation in hand that is
income if formed as corporation = earn × own ( 1 - corporate tax ) × ( 1 - personal tax )
income if formed as corporation = 500000 × 10% ( 1 - 34% ) × ( 1 - 35% )
income if formed as corporation =$21450
and
income will be taxable if form partnership that is
income if formed partnership = earn × own ( 1 - personal tax )
put here value
income if formed partnership = 500000 × 10% ( 1 - 35% )
income if formed partnership = $32500
so
additional income is $32500 - $21450
additional income is $11050
