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3 years ago

with reference to relevant legislation , case law, and secondary sources briefly explain different functions of taxation

Business

1 answer:

svetlana [45]3 years ago

8 0

Answer:

Tax is a statutory obligation to pay an amount to the state or other public body, which is imposed on a person or company on the basis of their activities, without a direct connection to consideration from the payee. The main purpose is usually to finance the public sector. The tax can also have other purposes, such as equalizing income or influencing people's actions with the help of financial incentives.

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Dodge, Incorporated acquires 15% of Gates Corporation on January 1, 2013, for $105,000 when the book value of Gates was $600,000

nata0808 [166]

Answer:

Goodwill 35,000 debit

Investment in Gates 25,000 credit

Retained Earnings 10,000 credit

--to adjust for change of method--

Explanation:

600,000 x 15% = 90,000

purchased at 105,000

goodwill of 15,000

+ 150,000 x 15% of net income = 22,500

- 50,000 x 15% dividends = (7,500)

investment at the end of 2013:

90,000 + 22,500 - 7,500 = 105,000

Then we purchase 25%

105,000 represent 15%

thus 25% would be: 105,000 / 0.15 x 0.25 = 175,000

purchased at 200,000

goodwill of 25,000 to be recognized.

So, equity method will be:

105,000 + 175,000 = 280,000 for the proportional equity

and 15,000 + 25,000 = 35,000 goodwill

Total of 315,000

While fair value will not recognize goodwill. and also, the investment is not modified when dividends and the gain for the year are delcared.

It measure at cost unless the market value of the stock decrease so we got:

105,000 1st purchase + 200,000 2nd purchase = 305,000

To adjust we are going to decrease investment by 25,000 and increase goodwill by 35,000 the other will go into retained earnings to balance out.

8 0

3 years ago

Indicate what happens to each of the following when the price level decreases:

aleksklad [387]

Answer:

a. Consumption will increase as goods and services are now cheaper for people to buy.

b. Investment increases as people will have more money to invest due to having spent less on consumption.

c. Net exports increases as exports become cheaper due to lower prices in the country. More people outside will therefore demand exports leading to them increasing more than imports.

d. Money Demand - B. There is a movement along the Money Demand curve to the Left

As price has decreased, the amount of money needed to buy goods will decrease which would lead to less demand for money. Money demand curve will show this as a movement to the left of the Money demand curve.

e. The interest rate will decrease because there will be more money to invest as explained above. With more money to invest, loanable funds will b in high supply thereby dropping interest rates.

f. Aggregate expenditure shifts right to show that expenditure has increased from people buying cheaper goods.

g. Aggregate demand - B. AD shifts to the Right.

More people will demand goods and services because they are cheaper.

8 0

3 years ago

Which one of the following is not an institutional requirement for markets to operate smoothly? Group of answer choices A equal

givi [52]

Answer:

A equal balance of economic power among buyers and sellers.

Explanation:

For a market to operate smoothly the operational requirement required include:

1. Social Institutions of trust

2. Money as a medium of exchange

3. Individualist institutions related to private and decision making.

When a market is operating smoothly it means that the financial safety net and settlement system works efficiently. Traders can operate seamlessly without delays in payments.

The option that is not a requirement for smooth operation of the market is - equal balance of economic power among buyers and sellers.

7 0

2 years ago

upola Fan Corporation issued 10%, $400,000, 10-year bonds for $385,000 on June 30, 2021. Debt issue costs were $1,500. Interest

maks197457 [2]

Answer:

See the journal entries below.

Explanation:

Note: This question is not complete. The complete question is therefore provided before answering the question as follows:

Cupola Fan Corporation issued 10%, $400,000, 10-year bonds for $385,000 on June 30, 2021. Debt issue costs were $1,500. Interest is paid semiannually on December 31 and June 30. One year from the issue date (July 1, 2022), the corporation exercised its call privilege and retired the bonds for $395,000. The corporation uses the straight-line method both to determine interest expense and to amortize debt issue costs.

Required: Prepare the journal entries to record the (a) issuance of the bonds, (b)the payment of interest and (c) amortization of debt issue costs on December 31, 2021 & June 30, 2022, and the (d) call of the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

The explanation of the answer in now given as follows:

(a) issuance of the bonds

The journal entries will look as follows:

Date Accounts Title $ Explan. Debit ($) Credit ($)

30 Jun. ’21 Cash (w.1) 383,500

Bonds Payable 383,500

(To record the issuance of Bonds.)

(b)the payment of interest

The journal entries will look as follows:

Date Accounts Title $ Explan. Debit ($) Credit ($)

31 Dec. ’21 Interest Expense 20,825

Bonds Payable (w.5) 825

Cash (w.2) 20,000

(To record the Interest Expense.)

30 Jun. ’22 Interest Expense 20,825

Bonds Payable (w.5) 825

Cash (w.2) 20,000

(To record the Interest Expense.)

(d) call of the bonds

The journal entries will look as follows:

Date Accounts Title $ Explan. Debit ($) Credit ($)

01 Jul. ’22 Bonds Payable (w.1) 385,150

Loss on Bonds retired (w.7) 9,850

Cash $395,000

(To record the bonds retired early.)

Workings:

w.1: Cash received = Bonds Payable = Amount the bond is issued - Debt issue costs = $385,000 - $1,500 = $383,500

w.2: Interest Expense= Bond face value * Bond rate * (Number of months in semiannual / Number of months in a year) = $400,000 * 10% * (6/12) = $20,000

w.3: Total cost on Bonds Payable issued = (Bond face value - Amount the bond is issued) + Debt issue costs = ($400,000 - $385,000) + $1,500 = $15,000 + $1,500 = $16,500

W.4: Annual cost amortization = Total cost on Bonds Payable issued * Bond rate =$16,500 * 10% = $1,650

w.5: Semiannual cost amortization = Annual cost amortization * (Number of months in semiannual / Number of months in a year) = $1,650 * (6/12) = $825

w.6: Total amount Payable on Bonds = Cash received from w.1 + Semiannual cost amortization on 31 December 2021 + + Semiannual cost amortization on 30 June 2022 = $383,500 + $825 + $825 = $385,150

w.7: Loss on retirement of Bonds = Amount the bond is retired - Total Amount Payable on Bonds = $395,000 - $385,150 = $9,850

5 0

2 years ago

Which is a man-made resource?

daser333 [38]

The answer is "tools".

Man-made resources are things or substances that have an incentive to human lives that don't happen in the regular world. Precedents of man-influenced assets to incorporate plastic, paper, pop, sheet metal, elastic and metal. These diverge from normal assets, for example, water, crops, daylight, unrefined petroleum, wood and gold.

Some man-made resources are almost fundamental to current human life, for example, solutions. Without pharmaceuticals, immunizations and comparative man-made synthetic compounds, numerous individuals would wind up wiped out and bite the dust. Others are not fundamental, and exist since individuals need them. For instance, numerous pesticides are man-made assets, and keeping in mind that not basic, their utilization improves the lives of numerous individuals.

8 0

3 years ago

Read 2 more answers