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Franking Ltd has a before tax profit of $100,000. The after-tax profit will be distributed to you, as the sole shareholder, as a dividend. Your marginal tax rate is 18% and the company tax rate is 30%. What amount of tax is payable (or refundable to the shareholder) by the shareholder on this dividend and what is the shareholder's after-tax dividend under the imputation system? Question 41 options: tax refundable is $12,000 and the after-tax dividend is $100,000. tax

Franking Ltd has a before tax profit of $100,000. The after-tax profit will be distributed to you, as the sole shareholder, as a dividend. Your marginal tax rate is 18% and the company tax rate is 30%. What amount of tax is payable (or refundable to the shareholder) by the shareholder on this dividend and what is the shareholder's after-tax dividend under the imputation system? Question 41 options: tax refundable is $12,000 and the after-tax dividend is $100,000. tax

FINANCIAL ACCOUNTING
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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Franking Ltd has a before tax profit of $100,000. The after-tax profit will be distributed to you, as the sole shareholder, as a dividend. Your marginal tax rate is 18% and the company tax rate is 30%. What amount of tax is payable (or refundable to the shareholder) by the shareholder on this dividend and what is the shareholder's after-tax dividend under the imputation system? Question 41 options: tax refundable is $12,000 and the after-tax dividend is $100,000. tax refundable is $12,000 and the after-tax dividend is $82,000. tax payable is $0 and the after-tax dividend is $70,000 tax payable is $18,000 and the after- tax dividend is $52,000
Transcribed Image Text:Franking Ltd has a before tax profit of $100,000. The after-tax profit will be distributed to you, as the sole shareholder, as a dividend. Your marginal tax rate is 18% and the company tax rate is 30%. What amount of tax is payable (or refundable to the shareholder) by the shareholder on this dividend and what is the shareholder's after-tax dividend under the imputation system? Question 41 options: tax refundable is $12,000 and the after-tax dividend is $100,000. tax refundable is $12,000 and the after-tax dividend is $82,000. tax payable is $0 and the after-tax dividend is $70,000 tax payable is $18,000 and the after- tax dividend is $52,000
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