If a taxpayer may choose to accept a reduced market rate of return on an investment to take advantage of a tax preference associated with the investment. in such case, the taxpayer will pay a/an: Implicit tax.
<h3>What is Implicit tax?</h3>
Implicit tax can be defined as the extra amount that a person pay for an assets if the owing the assets does not include any form of benefit. on the other hand it can as well be defined as the decline in the income of a person after deducting all necessary deduction such as tax in a situation were the income of the person increase.
A taxpayer that choose top accept reduced market rate of return on their investment or assets due to the benefit they want to derived for doing that will have to pay implicit tax.
Therefore this is an example of implicit tax.
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Answer:
The answer is D. have already been reinvested in the firm
Explanation:
Retained Earning is that part of income or profit that was not distributed out as dividend.
It is retained to grow the business or make the business bigger. It is part of shareholder's equity.
Option A is wrong. It doesn't increase with operating income. It depends on dividend policy and the net profit
Answer:
A. $0
B. $112
C. Investor A 14.3% gain
Investor B 18.5%
Explanation:
a) Based on the information given interest cost for investor A will be Zero
b) Calculation for What is the interestcost for investor B
Cost of interest =(100 shares*$35)×(100*%-69%)×0.08
Cost of interest = 3,500 x 0.40 x 0.08
Cost of interest =$112
c) Calculation for what percentage returndoes each investor earn
Investor A: 4,000 - 3,500 = 500/3,500
= 0.1428 =14.3% gain
Investor B: $500 gain - $112 interest
= $388/2,100 = 0.1848 =18.5%
Answer:
$13,300
Explanation:
The cost of improvement should be depreciation over the lower of - remaining lease term or estimated useful life of improvement
.
In our case, the lease number of years is shorter than the estimated life of improvement.
So, the cost will be depreciation for 5 years.
Hence, the amount to be recorded for first year:
= cost for improving leased office space ÷ Years remaining on lease
= 66,500 ÷ 5
= $13,300
Therefore, the amount of expense that should be recorded the first year related to the improvements is $13,300.