Sole shareholder and employee of black corporation
Course:- Accounting Basics
Reference No.:- EM13149022

Assignment Help
Assignment Help >> Accounting Basics

George Judson is the sole shareholder and employee of Black Corporation, a C corporation that is engaged exclusively in engineering services. During the year, Black has gross revenues of $300,000 and operating expenses (excluding salary) of $100,000. Further, Black Corporation pays George a salary of $150,000. The salary is reasonable in amount and George is in the 35% marginal tax bracket irrespective of any income from Black. Assuming that Black Corporation distributes all after-tax income as dividends, how much total combined income tax do Black and George pay in the current year? (Ignore any employment tax considerations.)

a. $64,875.

b. $70,000.

c. $74,875.

d. $81,375.

e. None of the above.

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Accounting Basics) Materials
Gemstone Corporation has a sales budget for next month of $600,000. Cost of goods sold is expected to be 30 percent of sales. All goods are purchased in the month used and p
Budgetary control consists of (a) preparing periodic budget reports that compare actual results with planned objectives, (b) analyzing the differences to determine their cau
The city reverses the Allowance for uncollectible taxes, delinquent ($ 8,000) because the lien has been satisfied and all prior year delinquent taxes have been collected.
What assumptions must be added to the traditional CAPM to derive the IAPM? What is the hedge portfolio in IAPM? What is the difference between an integrated and a segmented ca
Remington Shipping wants to begin using process costing in the shipping department. Direct materials represent the fuel costs to run the ship, and "Containers in transit" re
Determine the direct materials price variance, assuming that all materials costs are the responsibility of the materials purchasing manager.
At July 31, Shabbona Company has the following bank information: cash balance per bank $7,420; outstanding checks $762; deposits in transit $1,620; and a bank service char
HI6026 ACCOUNTING THEORY & CURRENT ISSUES GROUP ASSIGNMENT. Discuss the nature of "Legitimacy" and the importance of KGC Ltd. Maintaining legitimacy in the eyes of the tradit