Business
Business, 17.03.2020 03:28, abdullahs4639

Exercise 5-17 (Algorithmic) (LO. 4, 8) Rover Corporation would like to transfer excess cash to its sole shareholder, Aleshia, who is also an employee. Aleshia is in the 24% tax bracket, and Rover is subject to a 21% rate. Because Aleshia's contribution to the business is substantial, Rover believes that a $114,000 bonus in the current year is reasonable compensation and should be deductible by the corporation. However, Rover is considering paying Aleshia a $114,000 dividend because the tax rate on dividends is lower than the tax rate on compensation. Answer the following questions to determine whether Rover is correct in believing that a dividend is the better choice. a. Regarding taxes, which would benefit Aleshia the most? The $114,000 dividend because after taxes she would have $ from the dividend and $ 86,640 from the bonus. b. Regarding taxes, which would benefit Rover Corporation the most? The $114,000 bonus because it would save Rover $ 23,940 in taxes. c. Considering the two parties together, which alternative would provide the most overall tax savings? The $114,000 bonus because when the overall effect to both the corporatio

answer
Answers: 2

Other questions on the subject: Business

image
Business, 22.06.2019 12:20, lamwil9432
Selected transactions of the carolina company are listed below. classify each transaction as either an operating activity, an investing activity, a financing activity, or a noncash activity. 1. common stock is sold for cash above par value. 2. bonds payable are issued for cash at a discount
Answers: 2
image
Business, 22.06.2019 15:40, aroman4511
Rachel died in 2014 and her executor is finalizing her estate tax return. the executor has determined that rachel’s adjusted gross estate is $10,120,000 and that her estate is entitled to a charitable deduction in the amount of $500,000. using 2014 rates, calculate the estate tax liability for rachel’s estate.
Answers: 1
image
Business, 22.06.2019 17:00, justyne2004
Afinancing project has an initial cash inflow of $42,000 and cash flows of −$15,600, −$22,200, and −$18,000 for years 1 to 3, respectively. the required rate of return is 13 percent. what is the internal rate of return? should the project be accepted?
Answers: 1
image
Business, 22.06.2019 19:40, jair512872
Lauer corporation uses the periodic inventory system and has provided the following information about one of its laptop computers: date transaction number of units cost per unit 1/1 beginning inventory 210 $ 910 5/5 purchase 310 $ 1,010 8/10 purchase 410 $ 1,110 10/15 purchase 255 $ 1,160 during the year, lauer sold 1,025 laptop computers. what was cost of goods sold using the lifo cost flow assumption?
Answers: 1
Do you know the correct answer?
Exercise 5-17 (Algorithmic) (LO. 4, 8) Rover Corporation would like to transfer excess cash to its s...

Questions in other subjects:

Konu
Mathematics, 10.07.2019 23:40