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Elena L [17]
3 years ago
5

Plum Corporation will begin operations on January 1. Earnings for the next five years are projected to be relatively stable at a

bout $80,000 per year. The shareholders of Plum are in the 33% tax bracket. With the given scenarios, pick the best choice and explain why.
A. Assume that Plum will reinvest its after-tax earnings in the growth of the company, should Plum Corp operate as a C Corporation or an S Corporation?
B. Assume that Plum will distribute its after-tax earnings each year to its shareholders. Should Plum operate as a C corporation or an S Corporation?
Business
1 answer:
Paul [167]3 years ago
3 0

Answer:

Plum Corporation

The best choice is:

B. Assume that Plum will distribute its after-tax earnings each year to its shareholders. Should Plum operate as a C corporation or an S Corporation?

Explanation:

a) Tax is the greatest difference existing between a C corporation and an S corporation.  With a C corporation, the earnings are taxed twice.  When the C corporation earns income, it is taxed as a corporation.  When it distributes the after-tax earnings, the owners are taxed again in income tax.  This does not happen with an S corporation.  The S corporation does not pay corporate tax, instead, its owners pay their individual income taxes because the corporation's incomes are passed through the members.

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3 years ago
Describe some of the possible problems a retailer could experience when attempting to sell online internationally.
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Answer:

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7 0
2 years ago
Prior to adjustment at August 31, Salary Expense has a debit balance of $322,200. Salaries owed but not paid as of the same date
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Explanation:

The Journal entry is shown below:-

a. Salary Expense Dr,             $2,550

          To salaries payable                $2,550

(Being accrual of salary is recorded)

b. Income summary Dr,           $324,750

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