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

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter17: Corporations: Introduction And Operating Rules

Section: Chapter Questions

Problem 32P

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