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leva [86]
3 years ago
12

Jonathan (an individual) owns 100% of the stock of Husky, Inc. (a C corporation) and 100% of the stock of Calhoun, Inc. (another

C Corporation). Calhoun, Inc. is very successful and has millions in earnings and profits. Husky has not fared so well and has no earnings and profits. In the current year, Husky ran out of cash and could not make its payroll. Because of this situation, Jonathan directed Calhoun, Inc. to pay $100,000 in wages to employees of Husky. The $100,000 payment was not structured as a loan.
A. How should Calhoun, Inc. treat the $100,000 payment for tax purposes?
B. How should Jonathan treat the $100,000 payment for tax purposes?
Business
1 answer:
BaLLatris [955]3 years ago
8 0

Answer: A. As Expenses

B. No treatment.

Explanation:

A. The $100,000 was not structured and a loan so it will be accounted for as EXPENSES. This means that it will be deducted from the Income for the year from Calhoun's books.

B. A C Corporation is by definition taxed SEPARATELY from it's owners in the United States of America. Seeing as both Corporations were C Corporations, Jonathan as the owner of both companies need not worry about how he should treat the $100,000 payment as he will not ne taxed on it.

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amm1812

Answer:

C balance

Explanation:

it shows balance when you withdraw money

4 0
3 years ago
Beta Corporation acquired 100 percent of the voting shares of Yang Inc. by issuing 10,000 new shares of $10 par value common sto
poizon [28]

Answer:

The question is not complete.

Here is the complete question:

Beta Corporation acquired 100 percent of the voting shares of Yang Inc. by issuing 10,000 new shares of $10 par value common stock with a $40 market value.

Required:

1) Which company is the parent and which is the subsidiary?

2) Define a subsidiary corporation.

3) Define a parent corporation.

4) Which entity prepares consolidated worksheet?

5) Why are elimination entries used?

Here are the answers:

1. Beta Corporation is the parent while Yang Inc. is the subsidiary.

2.A subsidiary  corporation is an investee company in which another entity has a controlling interest in. This controlling interest is majorly achieved when the entity has more than 50% f the total voting shares.

3. A parent corporation is the investment entity which has a controlling interest in another entity called subsidiary.

4. It is the parent corporation that prepares consolidated worksheet.

5. Elimination entries are used to avoid double recording of values of assets, liabilities and equity in the consolidated accounts.

Explanation:

Parent and subsidiary is a form of relationship that exists where one entity has a controlling investment in another.

6 0
3 years ago
Place the events in order to describe how money the Fed adds to the economy starts to be multiplied. The reserve requirement in
Charra [1.4K]

Answer:

1. e. The Fed buys a security from a bank for $1,000.

In order to increase money supply, the Fed buys a security from the bank and gives them money.

2. d. The bank sets $100 aside as required reserves.

The bank will set aside 10% of the money paid by the Fed which comes to $100 leaving the bank with $900.

3. a. The bank lends $900 to a customer needing a loan.

The bank then lends this money to customer who needed it.

4. c. The customer spends the $900 at a store.

The customer then spends the money thereby transferring it to another party.

5. b. The store owner deposits the $900 in another bank.

The store owner then takes the money spent by the customer and deposits it in another bank. That bank then gives the Fed 10% and then the cycle repeats.

4 0
3 years ago
Read 2 more answers
Japan's domestic customers in the camera industry generated a high home demand, which has helped stimulate the innovation of cam
alina1380 [7]

Answer:

<u><em>Local demand conditions</em></u>.

Explanation:

Michael Porter developed the diamond model, which is a framework that identifies the factors that help some organizations in a given country to be internationally competitive because they are so innovative.

For Porter companies that have international competitive advantages have a set of localization advantages, which include:

  1. Strategy,
  2. Structure and Company Rivalry advantages;
  3. Factorial conditions;
  4. Demand conditions; and
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7 0
3 years ago
Suppose a firm produces a PERISHABLE good: produces $10 million worth of final goods only sells $9 million worth $1 million wort
charle [14.2K]

Answer:

No

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This does not violate the expenditure = output identity because this idenity says that goods-in-stock /unsold goods produced and ready for sale but not yet sold (inventory) are also a part of output, which if sold in the next accounting period, would still be calculated as sale in the current period, since it is the sale of output produced in the current year.

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