Determining corporation and partnership

Assignment Help Accounting Basics
Reference no: EM13115403

Calculate the tax disadvantage to organizing a U. S. business today, after passage of the Jobs and Growth Tax Relief Reconciliation Act of 2003, as a corporation versus a partnership under the following conditions. Assume that all earnings will be paid out as cash dividends. Operating income ( operating profit before taxes) will be $ 500,000 per year under either organizational form; the effective corporate profits tax rate is 35 percent ( T c 0.35); the average personal tax rate for the partners of the business is also 35 percent ( T p 0.35); and the capital gains tax rate on dividend income is 15 percent ( T cg 0.15). Then, recalculate the tax disadvantage using the same income but with the maximum tax rates that existed before 2003. These rates were 35 percent ( T c 0.35) on corporate profits and 38.6 percent ( T p 0.386) on personal investment income.

Reference no: EM13115403

Questions Cloud

Which would work better for the purpose : Concrete used in road construction is reinforced using steel bars in a grid, known collectively as "rebar." After many years, rebar will begin to corrode, and the concrete will weaken.
Question about constraints : Cully furniture buys 2 products for resale: big shelves (B) and medium shelves (M). Each big shelf costs $500 and requires 100 cubic feet of storage space, and each medium shelf costs $300 and requires 90 cubic feet of storage space.
Effective and efficient statistical measurements : What are some advantages and disadvantages of each: (a) team-based, (b) network-based, and (c) boundaryless organizations?
What is the concentration of the unknown sulfuric acid soln : A 15.00 mL sample of unknown concentration of sulfuric acid is precititated with excess lead(II) nitrate and a precipitate of lead(II) sulfate is collected.
Determining corporation and partnership : Calculate the tax disadvantage to organizing a U. S. business today, after passage of the Jobs and Growth Tax Relief Reconciliation Act of 2003, as a corporation versus a partnership under the following conditions.
What is the mass of the second isotope : The atomic weight of a newly discovered element is 98.225 amu. It has two naturally occuring isotopes. One isotope has a mass of 96.780 amu.
What type of feedback loop : A client was admitted to the hospital with hypertension. The development of arteriosclerosis associated with hypertension has further increased resistance to blood flow, worsening his hypertension. This is an example of what type of feedback loop?..
Define inductive reasoning and deductive reasoning : In your own words, explain what is meant by "inductive reasoning" and "deductive reasoning." State the differences between the two and provide examples to illustrate.
Balance sheet preparation and format : Balance sheet format:  Selected financial statement information and additional data for Johnston Enterprises is presented below.  Prepare a statement of cash flows for the year ending December 31,2010,

Reviews

Write a Review

Accounting Basics Questions & Answers

  Finding coyote corporation taxable income

Coyote owns 5% of Roadrunner Corporation’s stock. How much is Coyote Corporation’s taxable income (loss) for the year?

  Comprehensive checklist for evaluating internal controls

Use the checklist to outline phases of the internal control evaluation. You may use the (1) components of internal control, or (2) relevant assertions as headers within your checklist.

  Gross income with respect to bonds

Hugo was planting a tree when he unearthed 100,000 certificates of ITT bearer bonds, with a current value of $4 million.

  Prepare journal entries to record the following retirement

Prepare journal entries to record the following retirement. (Show computations and round to the nearest dollar.)The December 31, 2010 balance sheet of Wolfe Co. included the following items: 7.5% bonds payable due December 31, 2018 $1,200,000

  Prepare baileys journal entry to correct depreciation

In 2010, Bailey Corporation discovered that equipment purchased on January 1, 2008, for $50,000 was expensed at that time. The equipment should have been depreciated over 5 years, with no salvage value. The effective tax rate is 30%.

  Phases of the retirement plan

Kim is measuring her retirement plan. Assume she has $500,000 when she retires in an account that earns at an effective annual rate of 9%.

  Compute the effect of transfer on net income

Top management has decided the transfers between the two divisions should be at $19. Compute the effect of the transfer on the net income for the Battery Division, Automotive Division, and the total company

  Predetermined overhead application rate

What is the predetermined overhead application rate for the maintenance department? What is the additional cost to the maintenance department of providing another hour of maintenance?

  Journal entry of purchase of long-term bonds

Karr Company purchased bonds with a face amount of $400,000 between interest payment dates. Karr purchased the bonds at 102, paid brokerage costs of $6,000, and paid accrued interest for three months of $10,000.

  Advantage and disadvantages of budgeting

The break even or cost volume profit (CVP) model is based on a number of assumptions. Discuss these assumptions and whether or not they are correct in the real world. Finally, discuss how CVP analysis can be useful in planning. Describe the advant..

  Revenue and expense data for schumpert medical center

The subsequent two spreadsheets provide workload (expressed as relative weighted products (RWPs) for inpatient care), revenue, and expense data for Schumpert Medical Center covering their fiscal years 2010 and 2011.

  Fair value option of accounting

What financial instruments (financial assets and financial liabilities) are not eligible for an entity to use the fair value option of accounting?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd