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- Ian holds 100 shares in Big Bank Pty Ltd. The company paid a partially franked dividend of $4 per share (franked to 30%) on 1 June. Assume a corporate tax rate of 30%. How much tax (if any) must Ian pay on the dividend income? Assume his applicable marginal tax rate is 45% and this is the only transaction. a. $160 b. Nil c. $151 d. $57Ian holds 100 shares in Big Bank Pty Ltd. The company paid a fully franked dividend of $4 per share on 1 June 2020. Assume a corporate tax rate of 30%. How much tax (if any) must Ian pay on the dividend income? Assume his applicable marginal tax rate is 40%. a. $160 b. $57 c. $228 d. Nil1. Ian holds 100 shares in Big Bank Pty Ltd. The company paid a dividend of $4 per share (franked to 30%) on 1 June. Assume a corporate tax rate of 30%. What amount must Ian include in his assessable income for the year?a. $571b. $451c. $400d. $51
- You bought 1,000 shares of Tund Corp. stock for $90.03 per share and sold it for $60.59 per share within the same year. How will your gain or loss be treated when you file your taxes? O As a capital loss deducted from current taxable income O As a capital gain taxed at the current ordinary-income tax rate OAs a capital loss taxed at the long-term tax rate O As a capital loss deducted from taxable income in the year that the loss is realizedWCS Inc. owns some common stock of Palmer Inc. and it just received $1,800 of dividend. If WCS Inc. is subject to a tax rate of 21%, what is the tax on this investment income? A. $148 OB. $164 OC. $189 OD. $226 OE. $282 OF. $324 G. $378 H. None of the aboveYou bought 1,000 shares of Tund Corp. stock for $68.12 per share and sold it for $90.03 per share after a few years. How will your gain or loss be treated when you file your taxes? O As a capital gain taxed at the long-term tax rate O As a capital gain taxed at the current ordinary-income tax rate As a capital loss deducted from taxable income in the year that the loss is realized As a capital loss taxed at the long-term tax rate Suppose you want to invest $10,000. You have two options: (1) Invest in California municipal bonds with an expected rate of return of 9.00%, or (2) invest in J and K Corp.'s bonds with an expected rate of return of 12.15%. Assume that your decision is based on a tax perspective. If everything else is the same for both bonds, at what tax rate would you be indifferent between these two bonds? 25.93% 23.34% 22.04% O 32.41% According to a tax law established in 1969, taxpayers must pay the The applicable tax rate for S corporations is based on the: Stockholders'…
- Assume the following year 2 income statement for Johnstone Corporation, which was a C corporation in year 1 and elected to be taxed as an S corporation beginning in year 2. Johnstone's earnings and profits at the end of year 1 were $11,560. Marcus is Johnstone's sole shareholder, and he has a stock basis of $46,000 at the end of year 1. Johnstone Corporation Income Statement December 31, Year 2 Year 2 (S Corporation) $ 174,000 ( 41,000) ( 66,000) ( 56,500) (10,000) (4,600) 12,540 Sales r evenue Cost of goods sold Salary to owners Employee wages Depreciation expense Miscellaneous expenses Interest income Overall net income $ 8,440 What is Johnstone's accumulated adjustments account at the end of year 2, and what amount of dividend income does Marcus recognize on the year 2 distribution in each of the following alternative scenarios? (Leave no answer blank. Enter zero if applicable.) a. Johnstone distributed $7,200 to Marcus in year 2. Accumulated adjustments account Dividend income1. Ian holds 100 shares in Big Bank Pty Ltd. The company paid a fully franked dividend of $4 per share on 1 June 2021. Assume a corporate tax rate of 30%. What amount must Ian include in his assessable income for the 2021 income year? a. $171 b. $700 c. $571 d. $400 2. Which of the following tests must a company satisfy to be a resident of Australia for tax purposes? (Select the most appropriate.) Ordinary resident test Domicile test 183 day test Superannuation test Place of incorporation Central management and control Controlling shareholders a. 4, 5, 6 ,or 7 b. 5, 6, or 7 c. Any of the above. d. 5, 6, and 7 only 3. You are provided with the following information on the accounts receivable of Havelock Limited for the year ended 30 June 2021. What is the amount included in the taxable income for Havelock Limited based on the accrual and cash methods of…Q1. As of the end of the current tax year, Mad Corp. has accumulated E&P of $31,000 and current E&P of $1,000. At the end of the year, Mad Corp. distributes $50,000 to its sole shareholder, Mary, whose stock basis is $10,000 (before the distribution). What amount of the distribution is treated as a dividend? Q2. As of the end of the current tax year, Mad Corp. has accumulated E&P of $31,000 and current E&P of $1,000. At the end of the year, Mad Corp. distributes $50,000 to its sole shareholder, Mary, whose stock basis is $10,000. What is Mary’s stock basis after the distribution?
- Assume the following year 2 income statement for Johnstone Corporation, which was a C corporation in year 1 and elected to be taxed as an S corporation beginning in year 2. Johnstone's earnings and profits at the end of year 1 were $11,560. Marcus is Johnstone's sole shareholder, and he has a stock basis of $46,000 at the end of year 1. Johnstone Corporation Income Statement December 31, Year 2 Year 2 (S Corporation) $ 174,000 ( 41,000) ( 66,000) (56,500) (10,000) ( 4,600) 12,540 $ 8,440 Sales revenue Cost of goods sold Salary to owners Employee wages Depreciation expense Miscellaneous expenses Interest income Overall net income What is Johnstone's accumulated adjustments account at the end of year 2, and what amount of dividend income does Marcus recognize on the year 2 distribution in each of the following alternative scenarios? (Leave no answer blank. Enter zero if applicable.) d. Johnstone distributed $27,200 to Marcus in year 2. Accumulated adjustments account Dividend incomeAssume the following year 2 income statement for Johnstone Corporation, which was a C corporation in year 1 and elected to be taxed as an S corporation beginning in year 2. Johnstone's earnings and profits at the end of year 1 were $11,560. Marcus is Johnstone's sole shareholder, and he has a stock basis of $46,000 at the end of year 1. Johnstone Corporation Income Statement December 31, Year 2 Year 2 (S Corporation) $ 174,000 ( 41,000) (66,000) (56,500) (10,000) ( 4,600) 12,540 $ 8,440 Sales revenue Cost of goods sold Salary to owners Employee wages Depreciation expense Miscellaneous expenses Interest income Overall net income What is Johnstone's accumulated adjustments account at the end of year 2, and what amount of dividend income does Marcus recognize on the year 2 distribution in each of the following alternative scenarios? (Leave no answer blank. Enter zero if applicable.) b. Johnstone distributed $11,200 to Marcus in year 2. Accumulated adjustments account Dividend incomeAssume the following year 2 income statement for Johnstone Corporation, which was a C corporation in year 1 and elected to be taxed as an S corporation beginning in year 2. Johnstone's earnings and profits at the end of year 1 were $11,560. Marcus is Johnstone's sole shareholder, and he has a stock basis of $46,000 at the end of year 1. Johnstone Corporation Income Statement December 31, Year 2 Year 2 (S Corporation) $ 174,000 ( 41,000) ( 66,000) ( 56,500) (10,000) ( 4,600) 12,540 $ 8,440 Sales r evenue Cost of goods sold Salary to owners Employee wages Depreciation expense Miscellaneous expenses Interest income Overall net income What is Johnstone's accumulated adjustments account at the end of year 2, and what amount of dividend income does Marcus recognize on the year 2 distribution in each of the following alternative scenarios? (Leave no answer blank. Enter zero if applicable.) b. Johnstone distributed $11,200 to Marcus in year 2. Accumulated adjustments account $ Dividend income