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DochEvi [55]
2 years ago
15

Vito is the sole shareholder of Vito, Inc. He is also employed by the corporation. On June 30, 2020, Vito borrowed $8,000 from V

ito, Inc., and on July 1, 2021, he borrowed an additional $10,000. Both loans were due on demand. No interest was charged on the loans, and the Federal rate was 4% for all relevant dates. Vito used the money to purchase a boat, and he had $2,500 of investment income. Determine the tax consequences to Vito and Vito, Inc., in each of the following situations.
Business
1 answer:
otez555 [7]2 years ago
3 0

Answer:

The first loan for $8,000 could fall under the exemption of employer-employee loan. But then after the second is taken, that exemption would no longer apply. A minimum interest of $18,000 x 4% x 6/12 = $360 should be charged.

If the loan is considered a corporation-shareholder loan, then it doesn't qualify for any type of exemption, resulting in interests = ($8,000 x 4% x 6/12) = $160 for 2020

for 2021, interest applied = [($8,000 + $160) x 4%] + ($10,000 x 4% x 6/12) = $326.40 + $360 = $686.40

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You have been assigned the task of using the corporate, or free cash flow, model to estimate Petry Corporation’s intrinsic value
KengaRu [80]

Answer:

C. $43.33

Explanation:

FCF1 = $75.00

Constant growth rate = 5%

WACC = 10%

Total firm value = FCF1/(WACC-g) =$1,500

Value of debt & preferred=$200

Value of equity = $1,300

# of shares = 30

Value per share = equity value /shares =$43.33

8 0
3 years ago
The postal service of St. Vincent, an island in the West Indies, obtains a significant portion of its revenues from sales of spe
klemol [59]

Answer:

It is more profitable to maintain the price at $10

Explanation:

Giving the following information:

The souvenir sheets cost the postal service $1.15 each. St. Vincent has been selling these souvenir sheets for $10.00 each and ordinarily sells about 61,000 units. To test the market, the postal service recently priced a new souvenir sheet at $11.00 and sales dropped to 51,000 units.

We need to calculate the actual revenue and decide whether it is more convenient to increase the price or leave it as it is.

Actual revenue= 61,000 units* (10 - 1.15)= $539,850

New revenue= 51,000 units*(11 - 1.15)= $502,350

It is more profitable to maintain the price at $10

8 0
2 years ago
Herzberg's motivational factors and Maslow's esteem and self-actualization needs are similar. Explain how organizations can meet
Taya2010 [7]

Answer:

Organizations can meet the human needs identified by Maslow by studying and implementing the motivational factors specified by Herzberg.

The similarity of Herzberg's motivational factors and Maslow's esteem and self-actualization needs is addressed by the following questions: "What do people really want from their work?"  "How do organizations go about meeting these needs or ensuring that the needs are met?"

The answer is in the awareness of what workers want from the work they carry out for organizations.  As Maslow stated, people generally have five human needs: physiological needs, safety needs, social belonging, self-esteem, and self-actualization (later described as  transcendence).   It is only when the basic needs (physiological needs, safety needs, and social belonging and love needs) are satisfied  in that order, that workers would seek self-esteem and self-actualization or transcendence.  It is also at this level of seeking self-esteem and self-actualization that organizations would derive the greatest benefits from their workers.  It then behoves organizations to ensure that the basic needs are not denied, but to push forward to help their workers attain self-esteem and self-actualization.

Herzberg's motivational factors show that it is the responsibility of organizations to ensure that their workers achieve a sense of achievement in the work they do.  They should also be recognized for doing good jobs.  The nature of the work should be such that it does not demean the worker.  There should be dignity of labor.  Workers achieve more when they are made responsible for the outcome of their work.   Being assigned responsibilities help them to advance and and grow.  Organizations also need to manage well the extrinsic job elements that Herzberg identified as "hygiene factors," which concentrate on the work environment.

Explanation:

a) Frederick Herzberg identified certain job factors that bring about employee job satisfaction whereas others can create job dissatisfaction. According to Herzberg, "motivating factors (also called satisfiers) are primarily intrinsic job elements that lead to satisfaction, such as achievement, recognition, the (nature of) work itself, responsibility, advancement, and growth."  The dissatisfiers, on the other hand, he called "hygiene factors."   They are "extrinsic elements of the work environment such as company policy, relationships with supervisors, working conditions, relationships with peers and subordinates, salary and benefits, and job security, which can result in job dissatisfaction if not well managed."  An interesting result of Herzberg’s studies was that "the opposite of satisfaction is not dissatisfaction."  Herzberg's studies established that proper management of hygiene factors could prevent employee dissatisfaction, but that these factors could not serve as a source of satisfaction or motivation.  The summary is that motivational factors are quite distinct from hygiene factors.

b) Maslow identified the following hierarchy of human needs: physiological needs, safety needs, social belonging, self-esteem, and self-actualization (later described as  transcendence).  The hierarchy of needs, according to Maslow, show how humans essentially partake in behavioral motivation.   The summary of Maslow's hierarchy of human needs is that "people are motivated to fulfill basic needs before moving on to other, more advanced needs."

8 0
2 years ago
Maren received 10 NQOs (each option gives her the right to purchase 10 shares of stock for $8 per share) at the time she started
MAVERICK [17]

Answer:

$500 gain and $185 tax

Explanation:

Sale of share = No. of  NQOs × No. of shares  × Selling price per share

                      = 10 × 10 × $20

                      = $2,000

Basis = No. of  NQOs × No. of shares  × share price @$15

         = 10 × 10 × $15

         = $1,500

Gain realised = Sale of share - Basis

                      = $2,000 - $1,500

                      = $500

The tax is calculated as follows:

= Gain realised × marginal tax rate

= $500 × 37%

= $185

4 0
3 years ago
Once the root causes of performance gaps have been discovered, it is necessary to: ____________
AleksandrR [38]

Answer:

A

Explanation:

8 0
2 years ago
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