Problem 15-24 (LO. 6)Upward and Onward, Inc., a 5 501(c)(3) organization that provides training programs for government assistance recipients, reports thefollowing income and expenses from the sale of products associated with the training program.Gross income from sales$425,000Cost of goods sold106,000Advertising and selling expenses26,000Administrative expenses112,500Calculate Upward and Onward's UBIT under the following two assumptions. Assume a tax rate of 21%. It an amount is zero, enter "0".a. If the sale of the training program products is substantially related to Upward and Onward's exempt purpose, then Upward andOnward's unrelated business income tax (UBIT) isVeedackCheck My WorkThe unrelated business income tax (UBIT) is designed to treat the entity as if it were subject to the corporate income tax. Thus, the rates that areused are those applicable to a corporate taxpayer, In general, unrelated business income (UBI) is derived from activities not related to the exemptpurpose of the exempt organization.b. If the sale of the training program products is not substantially related to Upward and Onward's exempt purpose, then Upward andOnward's UBIT is sX.FeetkCheck My WorkIncorrectC. Select from the choices below which one properly expresses part (b) as a Microsoft Excel formula.UBIT MAX(0,((UBINETADIS+1000)1)

It is the income generated by the tax-exempt entities through taxable activities. This income is not…

Answered: Upward and Onward, Inc., a5 S501(e)(3)…

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter2: Financial Statements, Cash Flow, And Taxes

Section: Chapter Questions

Problem 14SP

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Upward and Onward, Inc., a5 S501(e)(3) organization that provides training programs for government assistance recipients, reports the following income and expenses from the sale of products associated with the training program.