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Oliga [24]
3 years ago
8

Because of its quality​ investments, Carolina Corporation has always generated​ 30% to​ 40% of its gross income from passive sou

rces. In the current​ year, Carolina sold a block of stock in a company it acquired several years ago. As a result of the​ sale, the corporation realized a substantial​ long-term capital gain that will increase this​ year's investment income from​ 40% to​ 70% of gross income. Explain to​ Carolina's president why she should or should not be worried about the personal holding company tax.
Business
1 answer:
choli [55]3 years ago
5 0

Answer:

Carolina's president should be worried that her company could be considered a personal holding company​ (PHC), since the stock ownership requirement is met. The company must compute its adjusted ordinary gross income​ (AOGI). As AOGI excludes any capital gains and Sec. 1231​ gains, Carolina can avoid being a PHC even if it recognizes a large capital gain this year if its other investment income that is PHC income does not exceed​ 60% of AOGI.

Explanation:

A personal holding company (PHC) is a C corporation in which more than 50% of the value of its outstanding stock is owned (directly or indirectly) by five or fewer individuals and which receives at least 60% of its adjusted ordinary gross income from passive sources. Meaning that this year's investment income should be less than 60% of gross income or Carolina Corporation will be considered a personal holding company (PHC).

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Monty Corp. bought equipment on January 1, 2022. The equipment cost $360000 and had an expected salvage value of $65000. The lif
Jet001 [13]

Answer:

$295000.

Explanation:

Depreciable cost is the asset costs minus salvage value.

For Monty Corp:

asset cost = $360000,

salvage value =  $65000

Depreciable  cost will be

=$360,000 - $65,000

=$295,000

5 0
3 years ago
you are forming a new company that delivers food to residents across college campuses. the primary focus is
Rus_ich [418]

Answer:

your primary focus should be on making sure that your system works

Explanation:

When doing this your primary focus should be on making sure that your system works. Meaning that you need to make sure that you have all of the necessary equipment to get the deliveries out on time and everything worked out so that you can assure customer satisfaction. Otherwise, customers will begin to review your company badly and as dysfunctional, which will destroy your business before it can even get started.

3 0
3 years ago
The following information pertains to Pernell Company's pension plan. Beginning PBO: $500,000; current service cost $50,000; dis
monitta

Answer:

= $560,000

Explanation:

Given that:

  • -Beginning PBO: 500,000
  • -Current Service Cost: 50,000
  • -Discount Rate: 6%  => interest cost = 500,000*6% = 30,000
  • -Contributions by Pernell: 40,000
  • -Benefits paid to employees 25,000
  • -Loss on PBO: 5,000

As we know that service cost; gains and losses; payments to retired employees; prior service cost; interest cost; payments to employees are factors that change the balance of the PBO

So the ending balance of the PBO will be:

Beginning PBO + Current Service Cost + Interest cost Loss on PBO -Benefits paid to employees

$500,000 + $50,000+ $30,000+$5,000-$25,000

= $560,000

4 0
3 years ago
What should be selected in the Payor Type field in the Deposit dialog box when entering capitation payments
natita [175]

Answer:

Capitation

Explanation:

Capitation should be selected. Capitation payments can be explained to be defined, periodic as well as per-patient payments that are usually on a monthly basis for every person who has entered into a capitated insurance plan. Such that, a provider can get paid per-month or per-patient, irrespective of the number of times that the patient came in for treatment or required service.

7 0
3 years ago
Net requirements for component J are as follows: 60 units in week 2, 40 units in week 3, and 60 units in week 5. If a fixed-peri
agasfer [191]

Answer:

e. none of the choices.

Explanation:

Based on the scenario being described within the question it can be said that  none of the choices are correct because this method focuses on obtaining an order quantity by fixing the quantity for a certain period of time, and calculating the total quantity of Net Requirements within the period. Therefore since the first week and week 4 are missing then none of these are correct, and since the information is not provided by choice answer d. is wrong too.

3 0
3 years ago
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