Assume Fred faces a potential liability exposure. The standard deviation of the probability distribution for the loss equals $12
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Answer:
$1,000
Explanation:
If total earnings are $500,000 and there are 400,000 shares, the original price per share is determined by:
The value of your invest will be same before and after the split, what will change is the number of shares and their individual price.
If you owned 100 shares at $10 each, the value of your investment is:
Total value of your investment will be $1,000.
<u>Solution and Explanation:</u>
Taxable income $330,000
Federal income tax liability paid (69,300 )
Tax-exempt interest income 5,000
Disallowed portion of meals and entertainment expenses (1,500)
Life insurance premiums paid, net of increase
In cash surrender value (3,500 minus 700) = (2,800)
Proceeds from life insurance policy, net cash
Surrender value (130,000 minus 20,000) 110,000
Excess capital losses (13,000)
Expenses (26,000 minus 16,000) 10,000
Allowable portion of 2013 SS 179
Expenses (20% multiply with 25,000) (5,000)
Dividends received deduction (70% multiply with $35,000) 24,500
LIFO recapture adjustment 10,000
Installment sale gain (3,000)
$394,900