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mario62 [17]
3 years ago
9

Beaver Corporation reported taxable income of $500,000 from operations this year. During the year, the company made a distributi

on of land to its sole shareholder, Eugenia VanDam. The land’s fair market value was $20,000 and its tax and E&P basis to Beaver was $50,000. Eugenia assumed a mortgage on the land of $25,000. Any gain from the distribution will be taxed at 21 percent. Beaver Corporation had accumulated E&P of $1,500,000. (Leave no answer blank. Enter zero if applicable.)Compute Beaver's total taxable income and federal income text paid as result of distribution.
Business
1 answer:
loris [4]3 years ago
4 0

Answer:

Beaver's total taxable income and federal income text paid as result of distribution is $500,000 and $105,000 respectively.

Explanation:

The computation of the taxable income and the federal income is shown below:

Taxable income = Taxable income + loss

                           = $500,000 + $0

                           = $500,000

Since the fair value is $20,000 is less than the mortgage on land i.e $25,000 so it would be a loss of $5,000 which would not be considered so we put the value zero.

And, the federal income equal to

= Taxable income × income tax rate

= $500,000 × 21%

= $105,000

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Answer:

March 1, purchased securities from Benton Corporation:

Dr Investment in securities 500,000

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The question is reproduced in the table below for clarity                        

                               Oven                                  Contribution

                         Hours Required                 Margin Per Unit

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Coffee Cakes        0.3                                        $5

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Explanation:

<em>When a business is faced with a problem of shortage of a resource which can be used to produced more than one product type, to maximize the use of the resource , the business should allocate it for production purpose in  such a way that it maximizes the contribution per unit of the scare resource.</em>

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<em>Calculate he contribution per oven hour and rank the product</em>

                                                                      cont/hr                   ranking

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Coffee cakes                 $5/0.3 hour=        16.67                      2nd

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