Which of the following statements is true? O Interest on bonds is not tax deductible O Interest on bonds is tax deductible O Dividends to stockholders are tax deductible O Bonds do not have to be repaid

Q: Which of the following tax concept(s) allow for the deferral of gains on nonrecognition…

A: Non-recognition transactions, according to the Internal Revenue services are those transactions, on…

Q: Which of the following creates temporary difference between financial and taxable income? * Interest…

A: Temporary differences are differences between pretax book income and taxable income that will…

Q: computing the cost of debt, a tax adjustment is required t arrive at after-tax cost of debt. Why is…

A: Cost of Equity: It is the rate of return the company pays to the investor for investing in the…

Q: Non-assessable income does not increase tax liability, but tax-free income increases tax liability-…

A: Non-Assessable Income-: Non-assessable non-exempt revenue is common or statutory revenue that is…

Q: Which of the following can be deducted as interest expense? Interest on personal debt Interest on…

A: Interest on personal debt  imputed interest on capital interest on assessed tax delibquency…

Q: Deferred income taxes result from: a. The fact that bond interest is deductible in the computa-tion…

A: Option C is correct.

Q: How company  take tax advantage of Bonds Payable

A: A bond is a financial instrument which is issued by an entity with the intention to re-pay the…

Q: Analysts should treat deferred tax liabilities that are expected to reverse as:A . equity.B .…

A: Option (B)is correct.

Q: An item that is considered a nondeductible item in taxable income is recognizing estimated bad debts…

A: Non deductible item in taxable income is an item which will not be considered for deduction while…

Q: If profits are eventually issued as dividends, IAET-subject profits are liable to income tax. False…

A: Tax is a charge which is charged on the taxable income and the dividend tax is the charge which is…

Q: Which of the following statements is (are) correct? (x)  Part of the administrative burden of a tax…

A: A mortgage is a contract between borrower and a lender that provides the lender the right to take…

Q: 3. Which of the following securities do not provide tax advantage to the company? A. Bond B. Equity…

A: There are various financial instruments some may provide tax benefit and other may not.

Q: How a company takes tax advantage of Bonds Payable (or any other fixed cost financing)?

A: Giving securities is one path for organizations to fund-raise. A bond capacities as a credit between…

Q: When the law itself provides for non-payment of taxes, such tax escap known as: a. Tax evasion b.…

A: Introduction:- Taxation plays vital role in every organization. Every company desire to reduce tax…

Q: The gain on early retire

A: Early retirement of bonds payable is where the bond holders are repaid before the maturity date.…

Q: True (t) or False (f) ______ The IRS does not require the taxpayer to use the same depreciation…

A: Due to various reasons such as normal wear & tear, obsolescence, change in technology, etc., the…

Q: Identify the following as either an advantage (A) or a disadvantage (D) of bond financing for a…

A: Bonds payable: Bonds payable are referred to long-term debts of the business, issued to various…

Q: While earnings on assets held in a Tax Free Savings Account (TFSA) will not be taxed while the…

A: False

Q: What elements must be present for an amount to constitute ordinary income under s 6-5 of ITAA 1997?…

A: Section 6-5 of the ITAA 1997 shows that your assessable income includes income as stated to ordinary…

Q: In order for you to be indifferent between the after-tax returns on a corporate bond paying 9% and a…

A: After tax return on corporate bond = Return on tax exempt municipal bond

Q: Which of the following items of interest expense may be deducted from gross income? Interest…

A: Interest expense will be allowed as a deduction if such Expense is incurred in the ordinary course…

Q: Which of the following statements is / are correct?

A: Refundable tax credits include earned income credit. Non refundable tax credits are those credits…

Q: A) Interest paid or accrued to purchase or carry tax-exempt investments is not deductible. B)…

A: Investment Income Under normal circumstances investment income can't be used for the tax deduction…

Q: Deferred tax liabilities should be treated as equity when:A . they are not expected to reverse.B .…

A: Deferred tax liability: Deferred tax liability is a tax that is measured or is outstanding for the…

Q: Which one of the following represents the tax payable? a. Tax payable is the balance of the total…

A: Tax is the amount that is to be paid on the income by individuals, firms and entities to the…

Q: How any company is taking tax advantage of bonds payable or any other fixed cost financing?

A: Bond can be considered as an I.O.U between the lender and the borrower that contains details about…

Q: How does a corporations debt differ from its equit

A: Following are the differences between corporation debt and its equity: Debt is the fund borrowed…

Q: Series EE bonds are: OU.S, savings bonds that produce income that may be exempt from some taxes.…

A: The EE Bond Series (commonly referred to as the "Patriot Bond") is a U.S. government bond that can…

Q: Listed below are items that are treated differently for accounting purposes than they are for tax…

A: The question is based on the concept of Accounting Standards.

Q: Which of the following is false? (a) Under GAAP, deferred taxes are reported based on the…

A: Liabilities that may occur in the future depending on the outcome of the future event are termed as…

Q: Why is the income tax payable not the same as income tax expense

A:

Q: There is no tax advantage with bonds when issued by companies True  False

A: Introduction: Bonds: Bonds are liability to the company. Bonds pay fixed rate of interest to its…

Q: The interest paid by municipal bonds is not subject to federal income taxation.  a. True    b. False

A: Municipal bonds also called as Muni bonds is a bond which is issued by the state governments, local…

Q: Because income from fixed income assets is taxed at a higher income tax rate than capital gains and…

A: Capital gain is the revenue generated from selling the assets either long term assets and short term…

Q: Which is not a benefit of debt to the corporation? a. interest payments are tax deductible b. when…

A: When debt is borrowed heavily,  it increases the burden of interest and principal repayment.  When…

Q: the process of reducing the allowable deduction of interest expense by a certain percentage is…

A: the process of reducing the allowable deduction of interest expense by a certain percentage is…

Q: The tax laws treat capital gains and losses differently from ordinary gains and losses. True or…

A: Ordinary income and capital gains income are the two broad categories of income in the tax code.…

Q: The deductibility of interest on borrowed money is limited to the extent that it was invested to…

A: Solution: True, The deductibility of interest on borrowed money is limited to the extent that it was…

Q: utline the main conclusions regarding the choice between debt and equity of both M&M(no tax)and…

A: M.M. approach s given by Modigliani and Miller. This theory is an extension of the net operating…

Q: What is the fundamental difference in a general stock redemption vs. a Liquidating Distribution?…

A: Income tax is the payment required to be made to the authority which is charged to collect the…

Fringe Benefit Tax

Fringe benefits are in addition to the compensation that companies give to their employees. It is an additional benefit above the stated salary. It helps to keep the employees of the firm motivated as sometimes the only salary is not enough to retain the quality employees of the firm. There are different types of fringe benefits. Fringe benefits are given in both private as well as public enterprises.