In year 2 it reports a $40,000 loss. For year 3, it reports taxable income from operations of $100,000 before any loss carryovers. Using the corporate tax rate table, determine how much tax Willow Corp. will pay for year 3. Answer: $4,500. Description (1) Year 3 taxable income $100,000 (2) Year 1 NOL carryforward ($30,000) (3) Year 2 NOL carryforward ($40,000) (4) Taxable income reported 30,000 (1) - (2) -
What amount should Ruiz record on March 1, 2010 as paid-in capital from stock warrants? (Points : 4) $28,800 $33,600 $41,600 $40,000 3. (TCO A) On January 1, 2010, Trent Company granted Dick Williams, an employee, an option to buy 100 shares of Trent Co. stock for $30 per share, the option exercisable for 5 years from date of grant. Using a fair value option pricing model, total compensation expense is determined to be $900. Williams exercised his option on September 1, 2010, and sold his 100 shares on December 1, 2010.
* Question 1 2 out of 2 points | | | Which of the following statements is CORRECT? | | | | | | | Correct Answer: | Sole proprietorships and partnerships generally have a tax advantage over many corporations, especially large ones. | | | | | * Question 2 0 out of 2 points | | | Which of the following statements is CORRECT? | | | | | | | Correct Answer: | One of the disadvantages of a sole proprietorship is that the proprietor is exposed to unlimited liability. | | | | | * Question 3 0 out of 2 points | | | You recently sold 100 shares of your new company, XYZ Corporation, to your brother at a family reunion.
Question 5. (TCOs 3, 4, 5, & 7) During the past two years, through extensive advertising and improved customer relations, Beech Corporation estimated that it had developed customer goodwill worth $100,000. For the current year, determine the amount of goodwill Beech Corporation may amortize. Question 6. (TCOs 3, 4, 5, & 7) Damien, not a dealer in real estate, sold real estate with a basis of $250,000 for $500,000 cash, a note for $250,000, and the buyer assumed Damien’s mortgage on the property of $125,000.
21 T/?/F An absorption income statement would show a cost of goods sold of £ 64,000. 22 T/?/F The break-even point in units for March 2002 is 45,000 Stringmints. 23 T/?/F The cash budget is part of the financial budget. 24 T/?/F Publishing annual reports exclusively via the Internet increase information asymmetries between different investors. 25 A Dutch insurance company has recently introduced a touch-screen based system that helps car mechanics in solving engine related problems, by storing detailed knowledge about engines, failures and suggested solutions.
Sales units Sales Selling price: $250 100,000 400 Selling price: $250(0.1)= $275 137500 Variable cost: $160 variable cost: $160 Fixed cost: 22500 Fixed cost: 22,500(0.1)= 24750 1. Compute the company’s current break-even point in units and dollars? Break even Units: Fixed expense/CMUnit 22500/90 = 250 CM: 250-160= 90 Dollars: Fixed expense/ Cm ratio 22500/.36= $62500 CM Ratio: units 90/ $250 selling price = .36 2. What is the company’s current margin of safety in Units, dollars and percentage? Margin of Safety (DOLLARS) Budgeted – break even = 100,000-62500= 37500 (Percentage) 37.500/100.000= 37.5% (Units) 37500/250= 150 3.Compute the company’s margin of safety in units assuming the proposal is accepted.
* June 2011, Netcrawler granted Michelle an employee stock option, valid until 2013 to acquire up to 1,000 common shares of Netcrawler at $20 per share. * April 30, 2012, Michelle exercised her stock option and acquired 1,000 common shares of Netcrawler at $20. * Michelle already owned 1,000 Netcrawler shares she previously brought from ex-employee for $10,000 * On same day she exercised her option, Michelle sold all 2,000 Netcrawler shares for $70,000 to an arm’s length party. Issue to analyze Michelle will like to know the tax consequence of her buying 1,000 shares of Netcrawler and selling 2,000 shares in the same year. Analysis based on above information Michelle is deemed to have received a benefit under 7(1), an employee acquiring the shares of an employer is said to not be dealing at arm’s length.
1) Taxpayer Limited paid $10,000 to purchase computer applications software (before apply HST) on January 31, 2013. Taxpayer Limited has a December 31 year-end. What is the maximum tax deduction that Taxpayer Limited can claim in respect of the above expenditure for its taxation year ended December 31, 2013, assuming that Taxpayer is registered to collect and remit HST? 2) CLASS 10.1 ABC Ltd. is a manufacturer with a December 31 year-end. On January 1, 2013, the undepreciated capital cost for Class 10.1 was $22,950.
During the tax year, 2010, the Petersan’s sold their primary residence for $520,000. A line by line review of the Petersan’s 2010 tax return will show the appropriate treatment of income, deductions, child care expense and the sale of
Moreover, no gain or loss is recognized to a corporation upon the receipt of money or other property in exchange for the stock of such corporation. The purpose of this is to encourage investors to contribute to corporations. Question 14:20 - What tax years are available to corporations? How do the options differ from other forms of business organizations? Corporations can choose either calendar year or fiscal year.