A business entity's taxable income before the cost of certain fringe benefits paid to owners and other employees is $41,600. The amounts paid for these fringe benefits are reported as follows.Note the following: (1) Assume the fringe benefit plans are not discriminatory and (2) The business entity is equally owned by three owners. OwnersOther EmployeesGroup term life insurance$4,400 $7,270 Lodging incurred for the convenience of the employer2,930 4,680 Qualified retirement plan2,500 5,620 a. Calculate the taxable income of the business entity if the entity is a partnership, a C corporation, and an S corporation.The taxable income of the business entity, if it is a partnership, is $____________. If the entity is a C corporation, it is $_______________, and if the entity is an S corporation, it is $_____________.

Taxable income refers to an income that is obtained after making adjustments of deductions and…

Answered: A business entity's taxable income…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A business entity's taxable income before the cost of certain fringe benefits paid to owners and other employees is $41,600. The amounts paid for these fringe benefits are reported as follows.

Note the following: (1) Assume the fringe benefit plans are not discriminatory and (2) The business entity is equally owned by three owners.

	Owners	Other Employees
Group term life insurance	$4,400		$7,270
Lodging incurred for the
convenience of the employer	2,930		4,680
Qualified retirement plan	2,500		5,620

a. Calculate the taxable income of the business entity if the entity is a partnership, a C corporation, and an S corporation.

The taxable income of the business entity, if it is a partnership, is $____________. If the entity is a C corporation, it is $_______________, and if the entity is an S corporation, it is $_____________.

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

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