Muddy Waters Pty Ltd (Muddy Waters) is an Australian resident private company, with a corporate tax...

 

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Muddy Waters Pty Ltd (Muddy Waters) is an Australian resident private company, with a corporate tax rate for imputation purposes for the 2020/21 income year of 30%. It pays a dividend of $20,000 on 1 August 2020 that is franked to 60%. On 1 September 2020, the company pays a dividend of $10,000 that is franked to 40%. On 1 March 2021, the company pays a dividend of $30,000 franked to 70%. Required Explain the consequences for Muddy Waters Ltd from making these various distributions. Muddy Waters Pty Ltd (Muddy Waters) is an Australian resident private company, with a corporate tax rate for imputation purposes for the 2020/21 income year of 30%. It pays a dividend of $20,000 on 1 August 2020 that is franked to 60%. On 1 September 2020, the company pays a dividend of $10,000 that is franked to 40%. On 1 March 2021, the company pays a dividend of $30,000 franked to 70%. Required Explain the consequences for Muddy Waters Ltd from making these various distributions.

Answer rating: 100% (QA)

When Muddy Waters Pty Ltd Muddy Waters makes dividend distributions the franking credits attached to those dividends have certain consequences for the ... View the full answer