Answered: Read each case and specify which…

Business

Accounting

Read each case and specify which standard was violated

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter13: Choice Of Business Entity—general Tax And Nontax Factors/formation

Section: Chapter Questions

Problem 57P

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Alyssa who is currently operating a machine shop is considering Dindin, an excellent employee, to be her partner. Unfortunately, Dindin could not afford to invest cash of P 500,000 which Alyssa needs to expand her business. As consultant, you asked Alyssa to answer some questions before giving an advice on whether Dindin should be taken in as partner. Details : 1.What is your present annual net income? P 450,000 2. Can you avail of a loan of P 500,000? Yes 3. What bank and what is the interest rate? Land Bank @ 17% 4. With the new equipment, how much additional income will it generate? P 450,000 5. In how many year are you going to pay the loan? 5 years 6. How much are you willing to pay Dindin as salary or profit? P 160,000 next is what are the answers of the following questions? Net income with the new equipment Less (Minus) interest charge on loan liability Net income after the interest charge Less (Minus) share of Dindin in the profits Share…
Alyssa who is currently operating a machine shop is considering Dindin, an excellent employee, to be her partner. Unfortunately, Dindin could not afford to invest cash of P 500,000 which Alyssa needs to expand her business. As consultant, you asked Alyssa to answer some questions before giving an advice on whether Dindin should be taken in as partner. What is your present annual net income? Can you avail of a loan of P 500,000? P 450,000 Yes Land Bank @ 17% P 450,000 What bank and what is the interest rate? With the new equipment, how much additional income will it generate? In how many year are you going to pay the loan? How much are you willing to pay Dindin as salary or profit? 5 years P 160,000 You drafted the following informatic and filed it up: Net income with the new equipment Less (Minus) interest charge on loan liability Net income after the interest charge Less (Minus) share of Dindin in the profits Share of Alyssa in the net income Net income the business is currently…
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