Streamplay Incorporated is a music streaming service. Subscriptions for the streaming service generated pre-tax income of $210,000 in its first year of operations. After paying taxes, the company distributed the remaining earnings to its sole owner Mira Lee. Assume the current corporate and personal income tax rate is 24%. Required: a. Calculate the total amount of tax paid if Steamplay Incorporated is treated as a corporation. b. Calculate the total amount of tax paid if Steamplay Incorporated is treated as a sole proprietorship
Streamplay Incorporated is a music streaming service. Subscriptions for the streaming service generated pre-tax income of $210,000 in its first year of operations. After paying taxes, the company distributed the remaining earnings to its sole owner Mira Lee. Assume the current corporate and personal income tax rate is 24%. Required: a. Calculate the total amount of tax paid if Steamplay Incorporated is treated as a corporation. b. Calculate the total amount of tax paid if Steamplay Incorporated is treated as a sole proprietorship
Chapter16: Accounting Periods And Methods
Section: Chapter Questions
Problem 3DQ
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Transcribed Image Text:Streamplay Incorporated is a music streaming service. Subscriptions for the streaming service generated pre-tax income of $210,000
in its first year of operations. After paying taxes, the company distributed the remaining earnings to its sole owner Mira Lee. Assume
the current corporate and personal income tax rate is 24%.
Required:
a. Calculate the total amount of tax paid if Steamplay Incorporated is treated as a corporation.
b. Calculate the total amount of tax paid if Steamplay Incorporated is treated as a sole proprietorship
Complete this question by entering your answers in the tabs below.
Required A Required B
Calculate the total amount of tax paid if Steamplay Incorporated is treated as a corporation.
Total amount of tax paid
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