A6 pCalculating taxes owed on Jake's investmentTwo years ago, Jake purchased 100 shares of a particular company's stock at a price of $77.14 per share. Last year, Jake received an annual dividendof $1.35 per share, and at the end of the year, a share of stock was trading at $86.71 per share. This year, Jake received an annual dividend of $1.49per share and at the end of the year sold all 100 shares at a price of $96.92 per share.In the first column of the following table, enter the total annual dividends Jake received each year, as well as the total capital gains at the end of eachyear.Suppose Jake is in the 32% tax bracket.Compute the taxes Jake pays each year on dividends and capital gains from this investment by completing the second column in the table.Note: Throughout this problem, please round your answers to the nearest cent.Year 1Year 2Dividends:Capital Gains:Dividends:Capital Gains:Amount$$$47.25$0.00$52.15$$296.70 $Taxes OwedThe total amount of investment income (pre-taxes) that Jake earned on this investment over the course of 2 years isThe total amount that Jake pays in taxes on income from this investment income is$348.85Grade It NowMacBook Pro$2,127.00Save & ContinueContinue without saving

Assuming tax period 2022 as per the rules of…

The total amount of investment income (pre-taxes) that Jake earned on this investment over the course of 2 years is The total amount that Jake pays in taxes on income from this investment income is $348.85 $2,127.00

The total amount of investment income (pre-taxes) that Jake earned on this investment over the course of 2 years is The total amount that Jake pays in taxes on income from this investment income is $348.85 $2,127.00

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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Concept explainers

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.

Question

p
Calculating taxes owed on Jake's investment
Two years ago, Jake purchased 100 shares of a particular company's stock at a price of $77.14 per share. Last year, Jake received an annual dividend
of $1.35 per share, and at the end of the year, a share of stock was trading at $86.71 per share. This year, Jake received an annual dividend of $1.49
per share and at the end of the year sold all 100 shares at a price of $96.92 per share.
In the first column of the following table, enter the total annual dividends Jake received each year, as well as the total capital gains at the end of each
year.
Suppose Jake is in the 32% tax bracket.
Compute the taxes Jake pays each year on dividends and capital gains from this investment by completing the second column in the table.
Note: Throughout this problem, please round your answers to the nearest cent.
Year 1
Year 2
Dividends:
Capital Gains:
Dividends:
Capital Gains:
Amount
$
$
$47.25
$0.00
$52.15
$
$296.70 $
Taxes Owed
The total amount of investment income (pre-taxes) that Jake earned on this investment over the course of 2 years is
The total amount that Jake pays in taxes on income from this investment income is
$348.85
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$2,127.00
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