Four requirements for a valid contract are an offer, acceptance by the other party of the offer, a mutual agreement or meeting of the minds of the contracting parties and a valid consideration.
Answer:
Bob Katz and Sally Mander
Taxable Income for 2018:
= $78,200
Explanation:
a) Data and Calculations:
Total wages = $102,400
Gain from sale of stock = 5,200
Interest income = 100
Total income = $107,700
less total deductions = (29,500)
Taxable Income = $78,200
b) Bob Katz and Sally Mander will have taxable income of $78,200 when the appropriate rate of tax is applied and the tax liability obtained, then the $1,500 tax credit will be deducted before arriving at the tax liability due.
c) The short-term capital gain of $5,200 is taxed as ordinary income. Since it is held for less than a year, it will be included in the taxable income for that year and it follows the same tax brackets as ordinary income. On the other hand, the long-term capital gain of $13,000 will attract a tax rate of 0 percent for a taxable income of $78,200. Otherwise, it will attract a tax rate of 15 percent or 20 percent, depending on income level. This means that long-term capital gains tax rates are much lower than the ordinary income tax rate.
The debt to equity ratio for the period, based on the total liabilities and total equity, would be 1.31
<h3>How to find the debt to equity ratio?</h3>
The debt to equity ratio shows the amount of debt that a company has as a ratio of the debts to the equity that the company has.
The debt to equity ratio can be found by the formula:
= Total liabilities / Total Equity
Total liabilities = $16, 113, 000
Total equity = $12, 300, 000
The debt to equity ratio is therefore:
= 16, 113, 000 / 12, 300, 000
= 1.31
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