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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
Publisher: Cengage Learning,
ISBN: 9781337794756

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BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
Publisher: Cengage Learning,
ISBN: 9781337794756
Chapter 21, Problem 1TF
Textbook Problem
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Income taxes are a unique expense of the corporate form of business.

To determine

Indicate whether the given statement is true or false.

Answer to Problem 1TF

The given statement is true.

Explanation of Solution

Corporation: The form of business entity ,which is incorporated by state law into a separate legal entity, owned by stockholders, and managed by board of directors elected by stockholders, is referred to as corporation.

Description: Corporate form of organizations incur income tax expense but the sole proprietorships and partnerships do not. Corporation has to pay tax because it is recognized as a separate taxable unit. Stockholders also pay the taxes on their share of earnings from the business. Proprietors or owners pay tax on the earnings from the sole proprietorship business. Similar to sole proprietors, partners pay tax on their share of partnership earnings. Hence, the statement is true.

Conclusion

Thus, the given statement is true, in stating that the income tax expense is unique for a corporate form of business organization.

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Chapter 21 Solutions

College Accounting, Chapters 1-27
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Ch. 21 - Ozit Company made four quarterly income tax...Ch. 21 - DWP Company had net income of 183,000 and paid...Ch. 21 - Teway Company declared and paid dividends in the...Ch. 21 - On September 30, Polmax Power Companys board of...Ch. 21 - On January 1, 20--, MC Company had a retained...Ch. 21 - What expense do corporations incur that sole...Ch. 21 - What are the two major sources of capital for...Ch. 21 - For what reason do corporations retain earnings in...Ch. 21 - How do the procedures for closing Income Summary...Ch. 21 - What are the three dates involved in the...Ch. 21 - What is the effect of a cash dividend on the...Ch. 21 - Give three reasons why a corporation may...Ch. 21 - Where should stock dividends distributable be...Ch. 21 - What effect does a stock dividend have on the...Ch. 21 - What is the primary reason for appropriating...Ch. 21 - How are appropriated and unappropriated retained...Ch. 21 - CORPORATE INCOME TAX Stanton Company estimates...Ch. 21 - CLOSING INCOME SUMMARY AND DIVIDENDS TO RETAINED...Ch. 21 - COMMON AND PREFERRED CASH DIVIDENDS Wang Company...Ch. 21 - STOCK DIVIDENDS Kaufman Company currently has...Ch. 21 - STOCK SPLIT Goldstein Company has 100,000 shares...Ch. 21 - RETAINED EARNINGS APPROPRIATION On October 2,...Ch. 21 - STATEMENT OF RETAINED EARNINGS McGregor Company...Ch. 21 - CASH DIVIDENDS AND INCOME TAXES During the year...Ch. 21 - CASH DIVIDENDS, STOCK DIVIDEND, AND STOCK SPLIT...Ch. 21 - CASH DIVIDEND AND APPROPRIATION OF RETAINED...Ch. 21 - RETAINED EARNINGS ACCOUNTS AND STATEMENT On...Ch. 21 - CORPORATE INCOME TAX Regis Company estimates that...Ch. 21 - CLOSING INCOME SUMMARY AND DIVIDENDS TO RETAINED...Ch. 21 - COMMON AND PREFERRED CASH DIVIDENDS Ramirez...Ch. 21 - STOCK DIVIDENDS Martinez Company currently has...Ch. 21 - STOCK SPLIT Rogerson Company has 40,000 shares of...Ch. 21 - RETAINED EARNINGS APPROPRIATION On October 2,...Ch. 21 - STATEMENT OF RETAINED EARNINGS Womack Company had...Ch. 21 - CASH DIVIDENDS AND INCOME TAXES During the year...Ch. 21 - CASH DIVIDENDS, STOCK DIVIDEND, AND STOCK SPLIT...Ch. 21 - CASH DI VIDEND AND APPROPRI ATION OF RET AINED...Ch. 21 - RETAINED EARNINGS ACCOUNTS AND STATEMENT On...Ch. 21 - MANAGING YOUR WRITING The investments committee of...Ch. 21 - ETHICS CASE Richard Petri is the chief financial...Ch. 21 - MASTRY PROBLEM On January 1, 20--, Dover Companys...Ch. 21 - CHALLENGE PROBLEM This problem challenges you to...

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