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 $135,600 bonus in the current year is reasonable compensation and should be deductible by the corporation. However, Rover is considering paying Aleshia a $135,600 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 $135,600 dividend because after taxes she would have $ from the dividend and $ from the bonus. b. Regarding taxes, which would benefit Rover Corporation the most?The $135,600 bonus because it would save Rover $ in taxes. c. Considering the two parties together, which alternative would provide the most overall tax savings?The $135,600 bonus because when the overall effect to both the corporation and the shareholder are considered the net tax savings is $.
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Levine inc., which produces a single product, has prepared the following standard cost sheet for one unit of the product. direct materials (9 pounds at $1.80 per pound) $16.20 direct labor (6 hours at $14.00 per hour) $84.00 during the month of april, the company manufactures 270 units and incurs the following actual costs. direct materials purchased and used (2,500 pounds) $5,000 direct labor (1,660 hours) $22,908 compute the total, price, and quantity variances for materials and labor.
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Rover Corporation would like to transfer excess cash to its sole shareholder, Aleshia, who is also a...
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