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riadik2000 [5.3K]
3 years ago
14

Dave and his friend Stewart each owns 50 percent of KBS. During the year, Dave receives $75,000

Business
1 answer:
qaws [65]3 years ago
8 0

Answer: $12717

Explanation:

1. The amount of FICA and/or self-employment tax that Dave is required to pay on his compensation and his

share of the KBS income if KBS is formed as a C corporation, will be:

= 7.65% × $75000

= 7.65/100 × $75000

= 0.0765 × $75000

= $5738

2. As an S Corporation will be:

= 7.65% × $75000

= 7.65/100 × $75000

= 0.0765 × $75000

= $5738

3. As a limited liability company will be:

Dave's compensation = 75,000

Dave's portion of income will be calculated as:

= 50% × $30,000

= 0.5 × $30,000

= $15,000

Total will then be:

= $75000 + $15000 = $90000

We then calculate the net earnings which will be:

= 92.35% × $90000

= 0.9235 × $90000

= $83115

The FICA and/or self-employment tax that Dave is required to pay will then be:

= 15.3% × $83115

= 0.153 × $83115

= $12717

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6 0
3 years ago
Digg Co. installs a manufacturing machine in its factory at the beginning of the year at a cost of $36,000. The machine's useful
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Answer:

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3 0
3 years ago
An increase in input costs in the production of electric automobiles caused the price of electric automobiles to rise. Holding e
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Answer:

4. The demand for gasoline-powered automobiles would increase and the equilibrium price of gasoline-powered automobiles would increase.

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