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Liula [17]
3 years ago
8

Regarding the tax treatment of payments to securities holders, it is true that _______________, while ____________________.

Business
1 answer:
Vladimir [108]3 years ago
6 0

Answer: (d)common stock dividends and preferred stock dividends are not tax-deductible; interest is tax-deductible

Explanation:

Here is the complete question:

Regarding the tax treatment of payments to securities holders, it is true that _________, while _________.

(a)interest and preferred stock dividends are not tax-deductible; common stock dividends are tax deductible

(b)interest and preferred stock dividends are tax-deductible; common stock dividends are not tax-deductible

(c)common stock dividends and preferred stock dividends are tax-deductible; interest is not tax-deductible

(d)common stock dividends and preferred stock dividends are not tax-deductible; interest is tax-deductible

Regarding the tax treatment of payments to securities holders, it is true that common stock dividends and preferred stock dividends are not tax-deductible while interest is tax-deductible.

It should be noted that the profit of a company is gotten when the expenses are deducted from the revenue. The dividends are not tax deductible as they are not expenses.

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On January 1, 2017, Crown Company sold property to Leary Company. There was no established exchange price for the property, and
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Answer:

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= $320,000

Explanation:

a) Data and Calculations:

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Payment period = 5

Annual installmental payments = $80,000

Prevailing rate of interest for similar note = 8%

Schedule

Period PV                 PMT            Interest               FV

1 $-591,650.08 $80,000.00 $-47,332.01 $558,982.09

2 $-558,982.09 $80,000.00 $-44,718.57 $523,700.66

3 $-523,700.66 $80,000.00 $-41,896.05 $485,596.71

4 $-485,596.71 $80,000.00 $-38,847.74 $444,444.44

5 $-444,444.44 $80,000.00 $-35,555.56 $400,000.00

Total                     $400,000.00    $-208,349.93

Carrying value

Ending value   = $400,000

Interest expense   -47,332.01

Cash repayment   -32,667.99

Carrying value = $320,000

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Explanation:

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