The additional spendable income will each investor have if the business is organized as a partnership rather than as a corporation is $22,100.
Income if formed as corporation in hands of each shareholder should be
= 1,000,000 × 10% × ( 1- .34 ) × (1- .35)
= 100,000 × .66 × .65
= $42,900
Now
Income will be taxable in hands of partner = 1,000,000 ×10% ×(1-.35)
= 100,000 ×.65
= 65000
Now
Additional income should be
= $65,000 - $42,900
= $22,100
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Answer:
$22,100
Explanation:
Calculation for the additional spendable income
First step is to find the Corporation Spendable income amount
Corporate taxes$340,000
($1,000,000*34%)
Income after corporate tax $660,000
($1,000,000-$340,000)
Tax on dividends $231,000
($660,000*35%)
Spendable income $429,000
($660,000-$231,000)
Second step is to find the Partnership Spendable income amount
Taxes paid by business $0
Income received by investors $1,000,000
Taxes paid by partners as personal income $350,000
($1,000,000*35%)
Spendable income $650,000
($1,000,000-$350,000)
Last step is to find the Difference between Corporation Spendable income amount and the Partnership Spendable income amount
Using this formula
Difference in Spendable income=Corporation Spendable income amount - Partnership Spendable income amount
Let plug in the formula
Difference in Spendable income=$429,000-$650,000
Difference in Spendable income=$221,000
Which means that the amount of $221,000 is the
Total gain amount from being a partnership.
Hence, the Individual investor gain will be calculated as $221,000*10%
Individual investor gain=$22,100
Therefore the amount of spendable income that each investor will have if the business is organized as a partnership rather than as a corporation will be $22,100
Answer:
Selection of Concept with its Best Description:
Concept Best Description
4. Total quality management Focuses on quality throughout the
production process
3. Customer orientation Flexible product designs can be modified
to accommodate customer choices.
2. Continuous improvements Every manager and employee constantly
looks for ways to improve company
operations.
5. Triple bottom line Reports on financial, social, and
environmental performance.
1. Just-in-time manufacturing Inventory is acquired or produced only
as needed.
Explanation:
1. Just-in-time manufacturing reduces manufacturing flow times and suppliers' and customers' response times. The purpose is to reduce waste and continuously improve operations.
2. Continuous improvement is a business approach that focuses on incremental or breakthrough improvement of processes, services, or products.
3. Customer orientation: An organization that has customer orientation focuses on the customer first and tries to satisfy the customer before meeting its own needs.
4. Total quality management: This is a management strategy whereby all members of the organization improve customer services, processes, products, and organizational culture in order to achieve long-term success.
5. Triple bottom line (TBL): To create greater business value, some organizations adopt the TBL performance evaluation framework, with a focus on social, environmental (or ecological) and financial performance.
Answer:
January 1, 2022
Dr. Cash $508,800
Dr. Discount on Bond $21,200
Cr. Bond Payable $530,000
Explanation:
The bond is issued on discount when the bond issuance proceeds are less than the face value of the bond. The discount is expensed over the bond period until maturity. It is added to the interest expense value to expense it.
Issuance value = $530,000 x 96% = $508,800
Discount on the bond = Face value - Issuance value = $530,000 - $508,800 = $21,200
If market interest rates rise after a bond is issued, the bond's price will decrease to remain competitive. To determine the price you'd pay for a bond with higher prevailing interest rates, you discount the bond's future payments by the current market rate. In this case, you'd likely pay less than the bond's face value due to the interest rate increase from 6% to 9%.
When a bond is issued, its face value and interest payments are based on the current interest rates. If the market interest rates increase, as in the scenario from 6% to 9%, the bond's fixed interest payments become less attractive compared to new bonds on the market offering higher rates. As a result, the existing bond's price will decrease to offer a potential investor the same effective yield as the new bonds issued at the higher rate. Therefore, if you are considering buying a $10,000 bond one year before its maturity when the market interest rate is 9%, you would expect to pay less than the face value of $10,000.
To calculate what you would be willing to pay for the bond, you need to discount the bond's remaining payments (interest and principal) back to their present value at the current market rate of 9%. Assuming annual interest payments, you would be entitled to one more interest payment of $600 (6% of $10,000) and the repayment of the $10,000 principal at maturity. Discounting these amounts back at 9% would give you the price you should be willing to pay today.
Using the formula for present value (PV) of a single payment, PV = FV / (1 + r)n, where FV is the future value, r is the interest rate, and n is the number of periods, calculate the present value of the interest payment and the principal, then sum them for the total price of the bond.
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Answer:
Option B ⇒ The annual interest rate on Note A is 9.35% .
Explanation:
Note B has an accrued interest for six months during 2013: $220,000 x .08 x 6/12 = $8,800.
The remainder of the accrued interest, $7,200 ($16,000 - $8,800) was from Note A, which was held for seven months in 2013.
Therefore, we have the following: $132,000 x annual interest rate x 7/12 = $7,200.
Thus, the annual interest rate on Note A would be ($7,200/132,000) x 12/7 = 9.35%.
Option B ⇒ 9.35% is the correct answer.
Answer:
In the short run, these workers are variable inputs, and the ovens arefixed inputs. TRUE
Explanation:
The statement is true. The worker are defined on a weekly basis at will by Yvette hence, short-term thus variable input.
In the other hand; the oven were leased for the entire year thus, unchangable in the short run. Yvette's decition about the number of oven in her kitchen is a long-term decition as currently are fixed.
Answer: 0.3069
Explanation:
Probability ofReturn Deviation Squared State Prob. This state This state from Mean Deviation × Sq. Dev. 0.45 25.00% 6.00% 0.36% 0.1620% 0.50 15.00% -4.00% 0.16% 0.0800% 0.05 5 .00% -14.00% 1 .96% 0 .0980% Expected return = 19 .00% 0 .34% 0 .3400% = Expected variance σ = 5.83% Coefficient of variation = σ/Expected return = 0.3069
To find the coefficient of variation on a company's stock, calculate the expected return, then the variance of the returns. Divide the standard deviation (square root of the variance) by the expected return. This gives a measure of risk per unit of return.
The coefficient of variation is used as a measure of relative variability. In this case, you would first calculate the expected return (E(R)), which is the sum of the each state's return times its probability. E(R) = (0.45 * 25%) + (0.5 * 15%) + (0.05 * 5%) = 16.75%. Secondly, you would calculate the variance of the returns which is the sum of the square of the difference of each state's return from the expected return times its probability. Lastly, the coefficient of variation is the standard deviation (the square root of the variance) divided by the expected return. This gives you a measure of risk per unit of return - hence the term 'relative variability'.
Investors in the stock market often use measures such as the coefficient of variation to give them an idea of the risk associated with different stocks. Though it's important to remember, as with any mathematical model, this is just a theoretical approximation, it doesn't account for external factors that could potentially affect the stock's performance.
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Contribution margin
Pretax income
(2) Compute the number of units expected to be sold next period.
Choose Numerator: / Choose Denominator: = Units
/ = Units
Answer and Explanation:
1. The computation of the total expected dollar sales for next period is given below:
Sales $4,410,000
Less: variable cost $1,764,000
Contribution margin $2,646,000
Less: fixed cost $2,364,000
Pre tax income $282,000
2. The number of units that should be sold is
= $2,646,000 ÷ $63 per unit
= 42,000 units
In this way it should be calculated