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FINANCIAL ACCOUNTING
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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Subject: accounting 

Ms. Kona owns a 11 percent Interest in Carlton LLC. This year, the LLC generated $73,600 ordinary Income. Ms. Kona's marginal tax rate is 32 percent, and she does not pay SE tax on her LLC Income. Required: a. Compute the tax cost on Ms. Kona's share of Carlton's Income assuming that she received a $35,000 cash distribution this year. b. Compute the tax cost on Ms. Kona's share of Carlton's Income assuming that she received no cash distribution this year. Note: For all requirements, round your final answers to the nearest whole dollar amount. a. Tax cost b. Tax cost Amount
Transcribed Image Text:Ms. Kona owns a 11 percent Interest in Carlton LLC. This year, the LLC generated $73,600 ordinary Income. Ms. Kona's marginal tax rate is 32 percent, and she does not pay SE tax on her LLC Income. Required: a. Compute the tax cost on Ms. Kona's share of Carlton's Income assuming that she received a $35,000 cash distribution this year. b. Compute the tax cost on Ms. Kona's share of Carlton's Income assuming that she received no cash distribution this year. Note: For all requirements, round your final answers to the nearest whole dollar amount. a. Tax cost b. Tax cost Amount
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