In 2014,Craig and Kathy Koehler owned a small business which was held as a proprietorship in Kathy's name.They were thinking of incorporating if that would lower their total tax liability.The Koehlers expected the company to earn $100,000 before taxes next year.They planned to take out salaries of $45,000,and to reinvest the rest in the business.Their personal deductions total $8,150 and they will file a joint return for their personal income. (1)What is their expected total tax liability as a proprietorship? (2)As a corporation? (3)Based on current taxes,should they incorporate? A) $23,304.50;$14,675.00;Yes B) $14,675.00;$13,427.50;Yes C) $23,304.50;$13,427.50;Yes D) $15,212.50;$23,450.00;No E) $20,778.00;$23,450.00;No

In 2014,Craig and Kathy Koehler owned a small business which was held as a proprietorship in Kathy's name.They were thinking of incorporating if that would lower their total tax liability.The Koehlers expected the company to earn $100,000 before taxes next year.They planned to take out salaries of $45,000,and to reinvest the rest in the business.Their personal deductions total $8,150 and they will file a joint return for their personal income. (1)What is their expected total tax liability as a proprietorship? (2)As a corporation? (3)Based on current taxes,should they incorporate? A) $23,304.50;$14,675.00;Yes B) $14,675.00;$13,427.50;Yes C) $23,304.50;$13,427.50;Yes D) $15,212.50;$23,450.00;No E) $20,778.00;$23,450.00;No

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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