Check my workfiling a consolidated tax return. What amount of income taxes doesthis affiliated group pay for the current period?c. Assume that Martin owns 80 percent of Rowen's voting stock, butthe companies elect to file separate tax returns. What is the totalamount of income taxes that these two companies pay for thecurrent period?d. Assume that Martin owns 70 percent of Rowen's voting stock,requiring separate tax returns. What is the total amount of incometax expense to be recognized in the consolidated income statementfor the current period? (Round your intermediate calculations andfinal answer to nearest whole dollar amount.)e. Assume that Martin owns 70 percent of Rowen's voting stock so thatseparate tax returns are required. What amount of income taxesdoes Martin have to pay for the current year?a. Income taxb. Income taxC.Total amount of income taxd.e.Total amount of income tax expenseIncome taxAmount

Part 2: Explanation1. Affiliated group filing consolidated tax return: - Calculate the total income…

Answered: Check my work filing a consolidated tax…

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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Ms. Xie, who is in the 37 percent tax bracket, is the sole shareholder and president of Xenon. The corporation's financial records show the following: Gross income from sales of goods: 1,590,000 Operating expenses: (930,000) Salary paid to Ms. Xie: (300,000) Dividend distributions: (200,000) Required: a. Compute the combined tax cost for Xenon and Ms. Xie. (Ignore payroll tax.) b. How would your computation change if Ms. Xie's salary was $500,000 and Xenon paid no dividends?
From a corporation's point of view, does the tax treatment of dividends and interest paid favor the use of debt financing or equity financing? O Debt financing Equity financing You bought 1,000 shares of Tund Corp. stock for $60.59 per share and sold it for $82.35 per share after a few years. How will your gain or loss be treated when you file your taxes? will O As a capital gain taxed at the long-term tax rate O As a capital gain taxed at the current ordinary-income tax rate Depreciation expenses directly affect a company's taxable income. An increase in depreciation expense will lead to a tax deducted from a company's earnings, thus leading to a operating cash flow. According to a tax law established in 1969, taxpayers must pay the The applicable tax rate for S corporations is based on the: Stockholders' individual tax rates O Corporate tax rate taxable income. It of the Alternative Minimum Tax (AMT) or regular tax.
Required information [The following information applies to the questions displayed below.] Andrea would like to organize SHO as either an LLC (taxed as a sole proprietorship) or a C corporation. In either form, the entity is expected to generate an 12 percent annual before-tax return on a $920,000 investment. Andrea's marginal income tax rate is 35 percent and her tax rate on dividends and capital gains is 15 percent. Andrea will also pay a 3.8 percent net investment income tax on dividends and capital gains she recognizes. If Andrea organizes SHO as an LLC, Andrea will be required to pay an additional 2.9 percent for self-employment tax and an additional 0.9 percent for the additional Medicare tax. Further, she is eligible to claim the deduction for qualified business income. Assume that SHO will pay out all of its after-tax earnings every year as a dividend if it is formed as a C corporation. a. How much cash after taxes would Andrea receive from her investment in the first year if…
Sparrow Corporation would like you to review its employee fringe benefits program with regard to the tax consequences of the plan for the company's president (Polly), who is also the majority shareholder. For the following items, indicate what amount, if any, is included in Polly's gross income. If an amount is zero, enter "0".
Nicole and Mohammad (married taxpayers filing jointly) are equal owners in an S corporation. The company reported sales revenue of $410,000 and expenses of $287,000. The corporation also earned $21,000 in taxable interest and dividend income and had $13,650 investment interest expense. Required: How are these amounts reported for tax purposes in the following schedules? > Answer is complete but not entirely correct. Schedule A Schedule B Schedule E $ $ $ Amount 0X 21,000✔ 13,650 x
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Amy and Brian were investigating the acquisition of a tax accounting business, Bottom Line Incorporated (BLI). As part of their discussions with the sole shareholder of the corporation, Ernesto Young, they examined the company's tax accounting balance sheet. The relevant information is summarized as follows: (Leave no answer blank. Enter zero if applicable. Negative amounts should be indicated by a minus sign.) Ad justed Tax Basis $ 6,000 9,000 56,500 139,000 $ 210,500 PMV Appreciation Cash Receivables Building $ 6,000 9,000 113,000 239,000 ६ 367,000 56,500 100,000 $ 156,500 Land Total Payables Mortgage $ 12,000 132,000 $ 144,000 $ 12,000 132,000 $144,000 Total * The mortgage is attached to the building and land. Ernesto was asking for $493,000 for the company. His tax basis in the BLI stock was $150,000. Included in the sales price was an unrecognized customer list valued at $150,000. The unallocated portion of the purchase price ($120,000) will be recorded as goodwill. Assume Ernesto…
n each of the following cases, discuss how the taxpayers might respond to a tax rate increase in a manner consistent with the income effect. a. Mr. Edwards earns $32,000 a year as an employee, and Mrs. Edwards doesn’t work.b. Mr. Frank earns $22,000 a year as an employee, and Mrs. Frank earns $10,000 a year as a self-employed worker.c. Mr. George earns $22,000 a year as an employee, and Mrs. George earns $10,000 a year as an employee.
Green Corporation is required to change its method of accounting for federal income tax purposes. The change will require an adjustment to income to be made over three tax periods. Joe, the sole shareholder of Green, wants to better understand the implications of this adjustment for E&P purposes, because he anticipates a distribution from Green in the current year. Explain to Joe the impact of the adjustment on E&P.

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