Required Journal entry

-Dominant- [34]

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8 0

3 years ago

New Business is just being formed by 10 investors, each of whom will own 10% of the business. The firm is expected to earn $500,

Triss [41]

Answer:

additional income is $11050 if the business is organized as a partnership rather than as a corporation

Explanation:

given data

investors = 10

own = 10%

earn = $500000

corporate tax rate = 34%

personal tax rate = 35 %

to find out

How much additional spendable income

solution

we find here first income if formed as corporation in hand that is

income if formed as corporation = earn × own ( 1 - corporate tax ) × ( 1 - personal tax )

income if formed as corporation = 500000 × 10% ( 1 - 34% ) × ( 1 - 35% )

income if formed as corporation =$21450

and

income will be taxable if form partnership that is

income if formed partnership = earn × own ( 1 - personal tax )

put here value

income if formed partnership = 500000 × 10% ( 1 - 35% )

income if formed partnership = $32500

so

additional income is $32500 - $21450

additional income is $11050

4 0

3 years ago

Rider Company is in the process of preparing it closing entries. It first closes its revenue accounts by crediting the Income Su

Ksivusya [100]

Answer:

B. Debit Income summary Debit $ 23,000

Retained Earnings Credit $ 23,000

Explanation:

The closing entries are recorded to close the current year's income statement to the retained earnings account,

According to the data in the question, the revenue is closed to the credit of the income Summary of $ 68,000 and the expenses are closed to the debit of the Income Summary of $ 45,000. This leaves a credit balance of $ 23,000 in the income summary account which is closed by debiting the income summary account and crediting the retained earnings account.

Since the revenue exceeded the expenses, the result ia a profir which should increase the retained earnings account, which would be the case by a credit to the retained earnings account.

7 0

3 years ago

A monopolist that practices perfect price discrimination a. creates no deadweight loss. b. charges one group of buyers a higher

adoni [48]

Answer:

A monopolist that practices perfect price discrimination

a. creates no deadweight loss.

Explanation:

Theoretically, if a monopolist is able to practice perfect price discrimination:

marginal revenue curve = demand curve
consumer surplus = 0
every customer pays the highest amount that they are willing to pay
production level = perfectly competitive level of output

4 0

3 years ago

f-1. Assume that no intra-entity inventory or land sales occurred between Placid Lake and Scenic. Instead, on January 1, 2020, S

Margarita [4]

Answer:

Journal 1

Debit : Other Income $34,000

Credit : Equipment $34,000

Journal 2

Debit : Accumulated depreciation $6,800

Credit : depreciation $6,800

Explanation:

Step 1 : Eliminate the Income resulting from sale and the additional value of equipment sitting in the buyer books

Income = Selling Price - Carrying Amount

where,

Carrying Amount = Cost - Accumulated depreciation

= $84,000

therefore,

Income = $118,000 - $84,000 = $34,000

Journal;

Debit : Other Income $34,000

Credit : Equipment $34,000

Step 2 : Eliminate the unrealized profit as a result of additional asset value

unrealized profit = income ÷ remaining useful life

= $34,000 ÷ 5

= $6,800

Journal;

Debit : Accumulated depreciation $6,800

Credit : depreciation $6,800

7 0

3 years ago