Juan and Pedro considered dividing profits by making use of salaries and bonuses. Bonuses will be 10% of the net income after salaries and bonuses. Juan will receive a salary of P30,000 and a bonus. Pedro has the option of receiving a salary of P40,000 and a 10% bonus or a salary of P52,000. What level of income will make Pedro indifferent?
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Juan and Pedro considered dividing profits by making use of salaries and bonuses. Bonuses will be 10% of the net income after salaries and bonuses. Juan will receive a salary of P30,000 and a bonus. Pedro has the option of receiving a salary of P40,000 and a 10% bonus or a salary of P52,000. What level of income will make Pedro indifferent?
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- Mr. Abdullah's monthly salary is RO 200 but he also gets additional income based on his productivity. This additional income is an example of which of the following? A)Non-financial benefit B)Incentive C)Fringe benefits D)Non-monetary rewardUnderstand the reporting effect: If Brooke sells the stock and includes the $80,000 gain in pretax income, will she get her bonus? Assume any bonus paid to Brooke is not included in calculating pretax income. No, Brooke will not receive a bonus since bonuses are only paid out when operational profits grow by 10%, but this is a capital gain on the sale of an investment or shares, thus it is not a component of operating earnings. She will receive a bonus only if operational profits grow by 10%. Specify the options: Instead of reporting the gain as part of pretax income, how else might Brooke report the gain on the sale? Brooke Report this profit as a capital gain or profit on the sale of an investment; it is not included in revenue or operational profits. Identify the impact: Does Brooke's decision to classify the gain on the sale of treasury stock as part of pretax income affect the company? Yes, Brooke's choice has an impact on the firm since earnings have increased as a…Ryan, an agent, was able to sell Mikoy Frozen Products worth 50,000.00. Given her commission of 10%. How much will he receive if his earnings are based on commission alone?
- Jana just found out that she is going to receive an end-of-year bonus of $40,000. She is in the 35 percent marginal tax bracket. Calculate her income tax on this bonus. Now assume that instead of receiving a bonus, Jana receives the $40,000 as a long-term capital gain. What will be her tax? Which form of compensation offers Jana the best after-tax return? Would your calculation be different if the gain was short-term rather than long-term? Give typing answer with explanation and conclusionSuppose that Thomas Lee is enrolled in a defined contribution plan in which the employer contributes $8,000 each year. Thomas is earning $80,000 this year and his tax rate is 30 percent (which is not expected to change). Assume that the before- tax rate of return is 8 percent. (a) What is the additional amount of funds that Thomas will have when he reaches retirement in 10 years as a result of this year's service? (b) Suppose that Thomas's employer is planning to reduce half of their contribution to the defined contribution plan. Assume that Thomas would like to keep his retirement funds the same as they would have been with the defined contribution plan. If Thomas's only opportunity to save for retirement is in a nonqualified savings plan (no tax benefits), how much would Thomas need to receive in additional salary (which he would then save) to achieve his objective?Kristen, the president and sole shareholder of Egret Corporation, has earned a salary bonus of $30,000 for the current year. Because of the lower tax rates on qualifying dividends, Kristen is considering substituting a dividend for the bonus. Assume that the tax rates are 24% for Kristen and 21% for Egret Corporation. Question Content Area a. How much better off would Kristen be if she were paid a dividend rather than salary? If Kristen were paid a bonus, she would receive $fill in the blank bcbd0cf5affa04c_1 22,800 after taxes. If Kristen receives a dividend rather than salary, she would receive $fill in the blank bcbd0cf5affa04c_2 25,500 after taxes. Thus, she would be better off by receiving the dividend . Feedback Area Feedback Closely held corporations have considerable discretion regarding their dividend policies. In the past, the double tax result provided strong motivation to avoid the payment of dividends. Instead, the incentive was to bail out corporate profits in a…
- Using the Train act shown below, how much annual tax will be paid by a salesman who earns a basic salary of Php. 450,000.00 per year plus a commission of 20% if he sold over Php. 30,000? Assuming the salesman was able to sell Php. 50,000 regularly per month. He has a total deduction of Php. 70,000 per year. What is his monthly tax deduction?Carrie, the president and sole shareholder of Energy Corporation, has earned a bonus of $100,000 for the current year. Because of the lower tax rates on qualifying dividends, Carrie is considering substituting a dividend for the bonus. Assume that the tax rates are 25% for Carrie and 21% for Energy Corporation. a. How much better off would Carrie be if she were paid a dividend rather than salary? b. How much better off would Energy Corporation be if it paid Carrie a salary rather than a dividend?Jana just found out that she is going to receive an end-of-year bonus of $54,000. She is in the 35 percent marginal tax bracket. Calculate her income tax on this bonus. Now assume that instead of receiving a bonus, Jana receives the $54,000 as a long-term capital gain. What will be her tax? Which form of compensation offers Jana the best after-tax return? Would your calculation be different if the gain was short-term rather than long-term? Her income tax on this bonus is?
- "At the beginning of the year, Mr. Lanier put $50,000 cash into Investment X. At the end of the year, he received a check for $2,800, representing his annual return on the investment. Mr. Lanier’s marginal tax rate on ordinary income is 37 percent. However, his return on Investment X is a capital gain taxed at 20 percent. Compute the value of the preferential rate to Mr. Lanier. "1. Luis Gomez is an operations manager for a large manufacturer. He earned $74,500 in 2018 and plans to contribute the maximum allowed to the firm's 401(k) plan. Assuming that Luis is in the 25 percent tax bracket, calculate his taxable income and the amount of his tax savings. Assume an individual employee can put as much as $18,500 into a tax-deferred 401(k) plan. The standard deduction for 2018 is $12,000. If necessary, round the answer for tax savings to the nearest cent. 1A. Taxable Income: 1B. Amount of his tax savings: 2. How much did it actually cost Luis on an after-tax basis to make this retirement plan contribution? If necessary, round the answer to the nearest cent. $_______At the beginning of the year, Mr. Lanier put $50,000 cash into Investment X. At the end of the year, he received a check for $2,800, representing his annual return on the investment. Mr. Lanier’s marginal tax rate on ordinary income is 37 percent. However, his return on Investment X is a capital gain taxed at 20 percent. At the beginning of the year, Mr. Lanier could have invested his $50,000 in Business Z with an 8 percent annual return. However, this return would have been ordinary income rather than capital gain. Required: Considering the fact that Mr. Lanier could have invested in Business Z, how much implicit tax did he pay with respect to Investment X? Did Mr. Lanier make the correct decision by putting his $50,000 into Investment X instead of Business Z?