a. Micah and Nancy own Financial Services, which pays a business income tax. Micah and Nancy do not have personal responsibility for the debts of Financial Services. b. Riley and Kay own Speedy Packages, a courier service. Both are personally liable for the debts of the business. c. IBC Services does not have separate legal existence apart from the one person who owns it. d. Trent Company is owned by Trent Malone, who is personally liable for the company's debts. e. Ownership of Zander Company is divided into 1,000 shares of stock. The company pays a business income tax. f. Physio Products does not pay income taxes and has one owner. The owner has unlimited lia- bility for business debt. g. AJ Company pays a business income tax and has two owners. h. Jeffy Auto is a separate legal entity from its owner, but it does not pay a business income tax.
a. Micah and Nancy own Financial Services, which pays a business income tax. Micah and Nancy do not have personal responsibility for the debts of Financial Services. b. Riley and Kay own Speedy Packages, a courier service. Both are personally liable for the debts of the business. c. IBC Services does not have separate legal existence apart from the one person who owns it. d. Trent Company is owned by Trent Malone, who is personally liable for the company's debts. e. Ownership of Zander Company is divided into 1,000 shares of stock. The company pays a business income tax. f. Physio Products does not pay income taxes and has one owner. The owner has unlimited lia- bility for business debt. g. AJ Company pays a business income tax and has two owners. h. Jeffy Auto is a separate legal entity from its owner, but it does not pay a business income tax.
Chapter15: Taxing Business Income
Section: Chapter Questions
Problem 30P
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Question
The following describe several different business organizations. Determine whether each description best refers to a sole proprietorship (SP),
Transcribed Image Text:a. Micah and Nancy own Financial Services, which pays a business income tax. Micah and
Nancy do not have personal responsibility for the debts of Financial Services.
b. Riley and Kay own Speedy Packages, a courier service. Both are personally liable for the
debts of the business.
c. IBC Services does not have separate legal existence apart from the one person who owns it.
d. Trent Company is owned by Trent Malone, who is personally liable for the company's debts.
e. Ownership of Zander Company is divided into 1,000 shares of stock. The company pays a
business income tax.
f. Physio Products does not pay income taxes and has one owner. The owner has unlimited lia-
bility for business debt.
g. AJ Company pays a business income tax and has two owners.
h. Jeffy Auto is a separate legal entity from its owner, but it does not pay a business income tax.
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