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TiliK225 [7]
3 years ago
12

An employee has enrolled in his company's nonqualified deferred compensation plan. The benefit paid at the time of the employee'

s retirement is:_______.
A) taxable as ordinary income to the employee and can be taken as a deduction by the employer.
B) taxable as ordinary income to the employee with no benefit allowed to the employer.
Business
1 answer:
OLga [1]3 years ago
4 0

Answer:

A) taxable as ordinary income to the employee and can be taken as a deduction by the employer.

Explanation:

When an employee defers to receive the compensation plan he gets the benefit of lower tax bracket each year, ultimately decreasing his tax liability.

Further when he receives the complete amount his income stands taxable. Accordingly at that time ordinary tax rates as per FICA are applicable.

On the employers part it is only deductible when the employee includes it in the income of the year, and pays tax on such compensation received.

Thus, when he receives it as compensation on retirement it is normally taxable at ordinary rates to the employee and deduction can be claimed by the employer.

You might be interested in
Agile project management is an approach to _______________product development time while _____________ risk through continuous i
grigory [225]

Answer:

Reduce, Minimizing

Explanation:

As per the given scenario Agile product, management wants to reduce the time for making the product on the other hand Agile minimizing the risk by making interaction from the customers and self-organizing team by taking care of quality, price, quantity, etc.

Since the company wants to reduce its product development time with the motive to produce more and more products in lesser time so that it delivers the product to the customer within the prescribed time.

7 0
3 years ago
Oregon Outfitters issues 1,700 shares of $1 par value common stock at $20 per share. Later in the year, the company decides to p
k0ka [10]

Answer:

A. Dr Cash $34,000

Cr Common Stock $1,700

Cr Paid in capital in excess of par-Common Stock $32,300

B. Dr Treasury stock $4,560

Cr Cash $4,560

C. Dr Cash $6,480

Cr Treasury stock $4,560

Cr To Paid in capital-Treasury stock $1,920

Explanation:

a. Preparation of the journal entry to Record the original issue of the 1,700 shares

Dr Cash $34,000

(1,700 shares × $20)

Cr Common Stock $1,700

(1,700 shares × $1)

Cr Paid in capital in excess of par-Common Stock $32,300

($34,000-$1,700)

(Being issue of common stock is recorded)

b. Preparation of the journal entry to Record the purchase of 240 shares

Dr Treasury stock $4,560

(240 shares × $19 per share)

Cr Cash $4,560

(Being repurchase of treasury stock is recorded)

C. Preparation to record the Journal entry if Oregon Outfitters resells the 240 shares of treasury stock at $27 per share.

Dr Cash $6,480

(240 shares × $27 per share.)

Cr Treasury stock $4,560

(240 shares × $19 per share)

Cr To Paid in capital-Treasury stock $1,920

($6,480-$4,560)

(Being reissue of treasury stock is recorded)

3 0
2 years ago
Suppose you own 500,000 shares of common stock in a firm with 40 million total shares outstanding. The firm announces a plan to
Roman55 [17]

Answer:

62,500 shares

Explanation:

common stock = 500,000 shares

Total shares outstanding = 40 million

Percentage of existing holding:

= (Shares of common stock ÷ Total shares outstanding) × 100

= (500,000 ÷ 40,000,000) × 100

= 1.25%

New shares that can be purchased:

= Number of new shares sold × Percentage of existing holding

= 5 million × 1.25%

= 62,500 shares

6 0
3 years ago
A _____ is applied to reduce estate tax when a large amount of real estate is for sale in one area.
adelina 88 [10]

A <u>marketability discount</u> is applied to reduce estate tax when a large amount of real estate is for sale in one area.

When evaluating private enterprises, the discount for lack of marketability (DLOM) is used. It has to do with the business not having a publicly listed stock on a stock market.

Since shares of publicly listed corporations may be purchased or sold in a controlled marketplace, these companies are seen to have a "market." Private businesses lack a centralised market and are thought to have smaller markets. In order to represent the lack of a market, private firms should, in principle, be valued lower than public companies, all else being equal.

To know more about estate tax refer here:

brainly.com/question/6362495

#SPJ4

8 0
1 year ago
Merone Company allocates materials handling cost to the company's two products using the below data: Modular Homes Prefab Barns
Solnce55 [7]

Answer:

$85,050

Explanation:

The material handling cost of Merone Company is allocated on the basis of direct labor hours.

Expected Total direct labor-hours (710 labor hour per unit * 5,100 units produced + 210 labor hour per unit * 8,100 units produced

= 3,621,000 + 1,701,000

Total Expected direct labor hours = 5,322,000

Material handling cost per labor hour: $266,100 / 5322000 labor hours

= $0.05 per labor hour

$0.05 per labor hour * 1,701,000 labor hours of Prefab Brans

= $85,050

7 0
3 years ago
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