Business, 15.07.2020 02:01 oliviaberta91

On January 2, Chaz transfers cash of $60,000 to a newly formed corporation for 100% of the stock. In its initial year, the corporation has net income of $15,000. The income is credited to its earnings and profits account. The corporation distributes $5,000 to Chaz. If an amount is zero, enter "0".
a. How do Chaz and the corporation treat the $5,000 distribution?
Chaz has a taxable dividend of $5000 and the corporation has a deduction of $0.
b. Assume instead that Chaz transfers to the corporation cash of $30,000 for stock and cash of $30,000 for a note of the same amount. The note is payable in equal annual installments of $3,000 and bears interest at the rate of 6%. No distributions are made during the year to Chaz. However, at the end of the year, the corporation pays an amount to meet the loan obligation (i. e., the annual $3,000 principal payment plus the interest due).
Determine the total amount of the payment and its tax treatment to Chaz and the corporation.
The corporate payment to Chaz totals $. Chaz has interest of $1800 and a note repayment of
$3000 of which $1800 is taxable to Chaz. The corporation has a deduction of $1800.

Answers: 1

Show answers

Another question on Business

Business, 22.06.2019 03:00

1) u.s. real gdp is substantially higher today than it was 60 years ago. what does this tell us, and what does it not tell us, about the well-being of u.s. residents? what are the limitations of the gdp as a measure of economic well-being? given the limitations, why is gdp usually regarded as the best single measure of a society’s economic well-being? 2) what is an intermediate good? how does an intermediate good differ from a final good? explain why it is the case that the value of intermediate goods produced and sold during the year is not included directly as part of gdp, but the value of intermediate goods produced and not sold is included directly as part of gdp.

Answers: 2

Answer

Business, 22.06.2019 12:50

You are working on a bid to build two city parks a year for the next three years. this project requires the purchase of $249,000 of equipment that will be depreciated using straight-line depreciation to a zero book value over the three-year project life. ignore bonus depreciation. the equipment can be sold at the end of the project for $115,000. you will also need $18.000 in net working capital for the duration of the project. the fixed costs will be $37000 a year and the variable costs will be $148,000 per park. your required rate of return is 14 percent and your tax rate is 21 percent. what is the minimal amount you should bid per park? (round your answer to the nearest $100) (a) $214,300 (b) $214,100 (c) $212,500 (d) $208,200 (e) $208,400

Answers: 3

Answer

Business, 22.06.2019 13:20

Suppose your rich uncle gave you $50,000, which you plan to use for graduate school. you will make the investment now, you expect to earn an annual return of 6%, and you will make 4 equal annual withdrawals, beginning 1 year from today. under these conditions, how large would each withdrawal be so there would be no funds remaining in the account after the 4th withdraw?

Answers: 3

Answer

Business, 22.06.2019 19:20

After jeff bezos read about how the internet was growing by 2,000 percent a month, he set out to use the internet as a new distribution channel and founded amazon, which is now the world's largest online retailer. this is clearly an example of a(n)a. firm that uses closed innovation. b. entrepreneur who commercialized invention into an innovation. c. business that entered the industry during its maturity stage. d. exception to the long tail business model

Answers: 1

Answer

You know the right answer?

On January 2, Chaz transfers cash of $60,000 to a newly formed corporation for 100% of the stock. In...

Questions