Barton Employ Mike's wife Elaine Case Study - Accounting and Finance Assignment Help

Assignment Task:

Task:

c. Should Barton employ Mike's wife Elaine for $50,000 rather than increase Mike's sal-ary? Take into consideration employment taxes as well as federal income taxes. Note, that Elaine's salary ...mid be well below the Social Security cap, so that she and the corporation each would incur the full amount of payroll taxes with the corporate port tion being deductible. Both Elaine's and the corporation's portion is 745%. Rho Corporation owns 22% of Divvy Corporation's stock. Divvy has paid Rho $100,000 in dividends for the current year with the last dividend payment nude on December 15. Rho is doing some year-end tax planning and, as of now, expects an operating loss of $35,000 not counting the dividend income. Thus, Rho expects $65,000 15100,000 —S35,0001 of taxable income before the dividends-received deduction. a. Calculate Rho's expected taxable income and tax liability for the current year using the given facts. b. Given the result in Part a, what year-end tax planning strategies can you suggest to improve Rho's benefit of the dividends-received deduction for the current year? 
 

TAX FORM/RETURN PREPARATION PROBLEMS

Melodic Musical Sales, Inc. is located at 5500 Fourth Avenue. City. ST 98765. The corporation uses the calendar year and accrual basis for both book and tax purposes. It is engaged in the sale of musical instruments with an employer identification number IFIN) of X X-2021019. The company incorporated on December 31, 2015, and began business on January 2, 2016. Table Q33 contains balance sheet information at January I, 2019, and December 31, 2019. Table Q34 preset unaudited GAAP income state-ment for 2019. These schedules are presented op a lr lums. Other information follows -?\15.1/4— the tables. 
 

It red Tax Payments (Form 2220): The corporation deposited estimated tax payments as follows: April 15, 2019 35,000 June 15. 2019 190,000 September 15. 2019 165.003 December 15, 2019 165,000 
Total $555,000 
Taxable income in 2018 was $1.2 million, and the 2018 tax was $252,000. The corpora-tion earned its 2019 taxable income evenly throughout the year. Therefore. it does not Inc the annualization or seasonal methods. Assume the underpayment penalty rate remains at 5% for the second quarter of 2020 (regardless of any announced rate change). (memory and rms: of Goods Sold (Form 112 f The corporation uses the periodic inventory method and prices its inventory using the lower of FIFO cost or market. Only beginning inventory, ending inventory, and purchases should be reflected on Form 1125-A. No other costs or expenses are allocated to cost of goods sold. Note: Assume the corporation is exempt from the uniform capitalization (UNICAP) rules. 
 

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