Leila owns 14% of the ordinary share of Datafarm Ltd. Assume dividends from Datafarm is the only incomeLeila has and she has no savings.In early March, 2020, Datafarm Ltd reported net profits after tax of $1,000,000 for the year, 2019 (1 January to31 December, 2019), and announced due to the effect of COVID 19 Global pandemic it expects net profitsafter tax for the current year, 2020, to be 30% lower than last year's figure. The company currently has adividend payout ratio of 30%, which it will apply for the annual dividend for 2019, payable in July 2020, but itwill reduce the dividend payout ratio to 20% for the dividend for 2020, payable in July, 2021In July, 2021, Leila wishes to spend $45,000. How much can she consume in July, 2020 if the capital marketoffers an interest rate of 9% per year?

Percentage shares held by Leila=14% Net profits (after Tax) for the year 2019=$1,000,000 Dividend…

Answered: Leila owns 14% of the ordinary share of…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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18
Information for 2020 follows for Laura Corp.: Laura decided to discontinue its entire wholesale division (a major line of business) and to keep its manufacturing division. On September 15, it sold the wholesale division to Wild Corp. During 2020, there were 500,000 common shares outstanding all year. Laura's tax rate is 20% on operating income and all gains and losses (use this rate where the tax provisions are not given). Laura prepares financial statements in accordance with IFRS.Prepare a multiple-step statement of financial performance for the year ended December 31, 2020, showing expenses by function. Include calculation of EPS.
The Brush Cherry Corporation has a $75,000 loss from operations (excluding dividends received) for 2019, and dividends of $150,000 received from 30 percent-owned domestic corporations. How much is the Brush Cherry Corporation's dividends received deduction for 2019? a.$45,000 b.$97,500 c.$120,000 d.$75,000 e.None of the amounts listed are correct.
Griggs Company bought 30% of Jackson Corporation in 2020. During 2020, Jackson reported net income in the amount of P400,000 and declared and paid dividends in the amount of P50,000. Griggs mistakenly accounted for the investment using the cost method instead of the equity method. What effect would this error have on the investment account and net income, respectively, for 2020? Choices: Overstated by P105,000; understated by P105,000. Understated by P105,000; understated by P105,000. Understated by P120,000; overstated by P105,000. Overstated by P120,000; overstated by P120.000.
in 2019, Reggie covered a P200,000 bad debt written off on Dec 2017. The gross income of Reggie in 2017 is P1,500,000 and he had a total of P300,000 business expense, excluding the bad debt written off of P400,000. Compute the income to be reported in 2019 if Reggie had a gross income and business expense of P1,000,000 and P300,000, respectively
Harrington Company was sued by an employee in late 2020. General counsel concluded that there was an 80 percent probability that the company would lose the lawsuit. The range of possible loss is estimated to be $20,000 to $70,000, with no amount in the range more likely than any other. The lawsuit was settled in 2021, with Harrington making a payment of $60,000. Assume that Harrington Company is a U.S.-based company that is issuing securities to foreign investors who require financial statements prepared in accordance with IFRS. Thus, adjustments to convert from U.S. GAAP to IFRS must be made. Ignore income taxes. Required: a. Prepare journal entries for this lawsuit for the years ending December 31, 2020, and December 31, 2021, under (1) U.S. GAAP and (2) IFRS. b. Prepare the entry(ies) that Harrington would make on the December 31, 2020, and December 31, 2021, conversion worksheets to convert U.S. GAAP balances to IFRS. Complete this question by entering your answers in the tabs…
Josie Inc was a C Corporation from January1, 2016 through Deceber 31, 2019 . At December 31,2019 it had earnings & profits of $100,000. Josie Inc made an S Corporation election on January 1, 2020. During 2020 , Josie Inc sold inventory to customers for $ 2,000,000 and had interest income of $1,000,000 . Josie Inc incurred $100,000 of expenses related to earning the interest income and $800,000 of expenses related to its sale of inventory. What amount of excess net passive income tax does Josie Inc pay in 2020? A.$47,250 B.$21,000 C.$189,000 D.$52,500
a. b Below are the taxable profits and losses for the past few years along with the tax rates on income reported for Olive Company. 2025 2026 2027 Income ($275,000) $70,000 $260,000 Tax Rate 20% 20% 20% Olive elects to use the carry forward procedures with no valuation allowance and strongly anticipates future profits to recover losses. Record the tax effect of the above for 2025 Show the income tax section and loss section of the income statement for 2025
In 2020, Compton Ltd (Compton) incurred a loss of $1,260,000 for tax purposes, when the tax rate was 30%. Because the company had no prior taxable profit, it carried the entire loss forward. Considering the size of the tax loss, Compton management expected to recover only three-quarters of the tax loss by applying the tax loss to future taxable profit. On 1 January 2021, the income tax rate increased from 30% to 32%. In 2022, it expects that the reminder of the tax loss created in 2020 can fully recover by future taxable profits. Compton has a year end of 31 December. Required: Which of the following statement is considered not true in accordance with HKAS 12 ‘Income Taxes’? A. Deferred tax assets should be adjusted upward to $94,500 in 2022 B. Deferred tax assets and liabilities as at start of 2021 should be adjusted upward C. Deferred tax assets in January 2021 should be increased by $18,900 D. 75% of the tax loss in 2020 will be recognized as deferred…
Select all that are true with respect to historical data on risk and return in the U.S. financial markets since about 1926, Group of answer choices A portfolio of small stocks has earned higher returns than large stocks, with less risk A portfolio of small stocks has earned higher returns that large stocks, with higher risk Stocks have outperformed government bonds, albeit with higher risk With respect to a diversified stock portfolio, the longer the holding period, the higher the risk. With respect to a diversified stock portfolio, the longer the holding period, the lower the risk.
Toward the end of 2021, XYZ Company, an investing firm, began selling subscriptions to its economic research pamphlets to its clients. It charges $1,200 a year for a subscription to a monthly update on economic outlooks, legal changes, and undervalued stocks, as determined by the firm. In December 2021, clients paid $300,000 for the annual subscriptions. In preparing its 2021 tax return, XYZ needs to verify the correct treatment for these subscriptions. 1. Where in the Codification would XYZ find the information needed? 2. Describe the required accounting for taxes regarding the subscriptions. Be sure to specify the amount of the effect on XYZ's 2021 taxes payable (and future years' taxes, if relevant) if the enacted tax rate is 21%.
Lily began trading on 1 February 2021. Her tax adjusted trading profits for the 15-month period ended 30 April 2022 were £30,000. Subsequent accounts will be prepared to 30 April cach year. Required: The resulted overlap profit amount is: a.£22.000 b.£4,000 c.£48.000 d.£24.000

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