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3 years ago

Why do you think the Federal government taxes long-term capital gains and qualified dividends at a lower rate than earned

Business

1 answer:

shusha [124]3 years ago

8 0

Answer:

The justification for a lower tax rate on capital gains relative to ordinary income is threefold: it is not indexed for inflation, it is a double tax, and it encourages present consumption over future consumption. ... Future personal consumption, in the form of savings, is taxed, while present consumption is not.

Explanation:

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On June 25, Gallatin Repair Service extended an offer of $123,000 for land that had been priced for sale at $141,000. On July 9,

Sedbober [7]

Answer: $134,000

Explanation:

The value that the land should be recorded in Easy Repair Service records will be $134,000 because it was the counter offer and the price paid by Easy Repair in the acquisition of the land, therefore this should be the value of the land.

The value for the acquisition of land include all expenses that were also involved when buying the land like the legal fees on the land etc but in this scenario, only the $134,000 was provided, hence, that's the answer.

7 0

3 years ago

A new American graduate is contemplating buying a

mash [69]

Answer:

The best option is to buy Japanese Car.

Explanation:

Fuel usage per year is 150000/ 8 = 18750 miles per year

Fuel cost (year 1 -8) = $3.0, $3.06, $3.12, $3.18, $3.25, $3.312, $3.38, $3.5

Japanese Car:

Fuel usage 18750 / 23 = 815 * $3 = $2446

Fuel charges (year 1 -8) = $2445, $2494, $2623, $2758. $2900, $3050, $3207, $3372

Repair Cost (year 1 - 8) = $700, $721, $742, $764, $787, $811, $835, $860

Insurance cost (Year 1 - 8) = $700, $714, $728, $742, $757, $772, $788, $804

Present value of cost at 5% = 24674.07

Cost of car is $30,000

Total cost = $54674.07

American Car:

Cost $35,000

Fuel usage 18750/20 = 937.5 * $3 per gallon = $2812.5.

Fuel charges (year 1 -8) = $2812, $2913, $2986, $3011. $3098, $3124, $3176, $3208

Repair Cost (year 1 - 8) = $800, $894, $921, $978, $1109, $1176, $1207, $1301

Insurance cost (Year 1 - 8) = $800, $827, $876, $898, $908, $932, $954, $934

Present value of cost at 5% = 25302.18

Cost of car is $35,000

Total cost = $60302.

German Car:

Cost = $45,000

Fuel usage 18750 / 21 = 892 * $3 = $2678

Fuel charges (year 1 -8) = $2679, $2732, $2786, $2842. $2899, $2987, $3077, $3171

Repair Cost (year 1 - 8) = $1000, $1040, $1081, $1124, $1169, $1216, $1265, $1316

Insurance cost (Year 1 - 8) = $850, $867, $884, $902, $920, $938, $957, $976

Present value of cost at 5% = 27105.73

Cost of car is $45,000

Total cost = $72105.

8 0

4 years ago

Champion Contractors completed the following transactions and events involving the purchase and operation of equipment in its bu

dybincka [34]

Answer and Explanation:

The Journal entries are shown below:-

Jan 1

Equipment Dr, $300,600 ($287,600 + $11,500 + $1,500)

To Cash $300,600

(Being equipment is recorded)

Jan 3

Equipment Dr, $4,800

To Cash $4,800

(Being equipment is recorded)

Dec 31

Depreciation expenses-equipment Dr, $70,850

($300,600 + $4,800 - $20,600 - $1,400) ÷ 4

To Accumulated depreciation-equiment $70,850

(Being depreciation expense is recorded)

Year 2018

Jan 1

Equiment Dr, $5,400

To Cash $5,400

(Being equipment is recorded)

Feb 17

Repair expenses Dr, $820

To Cash $820

(Being repair expense is recorded)

Dec 31

Depreciation expenses-equipment Dr, $43,590

To Accumulated depreciation-equiment $43,590

(Being depreciation expense is recorded)

For Computing the Depreciation year 2018

Particulars Amount

Jan 1 2017 Cost of loader ($287,600 + $11,500 + $1,500) $300,600

Add cost of air conditioning installation on

Jan 3 2017 $4,800

Book value of depreciation for year 2017 $305,400

Less: Depriciation of year 2017

($305,400 - $20,600 - $1,400) ÷ 4 $70,850

After depreciation the book value for year 2017 $234,550

Add: Cost to overhaul the loader's engine $5,400

Before depreciation the book value of 2018 $239,950

Depreciation of year 2018

($239,950 - $22,000) ÷ (4 - 2 + 1) $43,590

6 0

4 years ago

Gabi Gram started The Gram Co., a new business that began operations on May 1. The Gram Co. completed the following transactions

shusha [124]

Answer:

1. Asset and capital will increase

2. Current asset decrease

3. Asset and liability increase

4. Asset decrease

5. Asset increase

6. Asset increase

7. Asset decrease, expense increase

8. Asset increase

9. Asset increase

10. Asset decrease, liability decrease

11. Liability increased

12. Asset decrease

13. Asset decrease

14. Capital decrease

Explanation:

Income Statement for the month of May:

Sales Revenue $11,100

Less: Operating Expenses:

Cleaning service $750

Salary expense $750

Advertising expense $80

Salaries expense $750

Telephone bill $300

Utilities expense $280

Net Profit $8,190

4 0

3 years ago

For each of the following unrelated situations, calculate the annual amortization expense and prepare a journal entry to record

Montano1993 [528]

Answer:

(a) Debit Amortization expense - Patents for $43,750; and Credit Patents for $43,750.

(b) Debit Amortization expense - Patents for $5,230; and Credit Patents for $5,230.

Explanation:

(a) A patent with a 10-year remaining legal life was purchased for $350,000. The patent will be commercially exploitable for another eight years.

Annual amortization expenses = Purchase cost of the patent / Number of commercially exploitable years = $350,000 / 8 = $43,750

Therefore, the journal entries will look as follows:

General Journal

Description Debit ($) Credit ($)

Amortization expense - Patents 43,750

Patents 43,750

(To record patent amortization.)

(b) A patent was acquired on a device designed by a production worker. Although the cost of the patent to date consisted of $52,300 in legal fees for handling the patent application, the patent should be commercially valuable during its entire remaining legal life of 10 years and is currently worth $400,000.

Annual amortization expenses = Legal fees / Remaining legal life = $52,300 / 10 = $5,230

Therefore, the journal entries will look as follows:

General Journal

Description Debit ($) Credit ($)

Amortization expense - Patents 5,230

Patents 5,230

(To record patent amortization.)

(c) A franchise granting exclusive distribution rights for a new solar water heater within a three-state area for five years was obtained at a cost of $70,000. Satisfactory sales performance over the five years permits renewal of the franchise for another three years (at an additional cost determined at renewal).

Annual amortization expenses = Cost of acquiring the franchise / Number of years acquired = $70,000 / 5 = $14,000

Therefore, the journal entries will look as follows:

General Journal

Description Debit ($) Credit ($)

Amortization expense - franchise 14,000

franchise 14,000

(To record franchise amortization.)

4 0

3 years ago