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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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