Dave and his friend Stewart each owns 50 percent of KBS. During the year, Dave received...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Dave and his friend Stewart each owns 50 percent of KBS. During the year, Dave received $92,000 compensation for services he performed for KBS during the year. He performed a significant amount of work for the entity, and he was heavily involved in management decisions for the entity (he was not a passive investor in KBS). After deducting Dave's compensation, KBS reported taxable income of $36,800. How much FICA and/or self-employment tax is Dave required to pay on his compensation and his share of the KBS income if KBS is formed as a C corporation, an S corporation, or a limited liability company (taxed as a partnership) (ignore the 0.9 percent additional Medicare tax)? How much FICA tax would the entity be required to pay on the compensation paid to Dave? Note: Do not round any percentage calculations. Round other intermediate calculations and final answers to the nearest whole dollar amount. C Corporation S Corporation Limited liability company Dave and his friend Stewart each owns 50 percent of KBS. During the year, Dave received $92,000 compensation for services he performed for KBS during the year. He performed a significant amount of work for the entity, and he was heavily involved in management decisions for the entity (he was not a passive investor in KBS). After deducting Dave's compensation, KBS reported taxable income of $36,800. How much FICA and/or self-employment tax is Dave required to pay on his compensation and his share of the KBS income if KBS is formed as a C corporation, an S corporation, or a limited liability company (taxed as a partnership) (ignore the 0.9 percent additional Medicare tax)? How much FICA tax would the entity be required to pay on the compensation paid to Dave? Note: Do not round any percentage calculations. Round other intermediate calculations and final answers to the nearest whole dollar amount. C Corporation S Corporation Limited liability company
Expert Answer:
Answer rating: 100% (QA)
C CORPORATION 7038 FICA self employment medicare tax ... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
Suppose a U.S. firm buys $200,000 worth of television tubes from a Mexican manufacturer for delivery in 60 days with payment to be made in 90 days (30 days after the goods are received). The rising...
-
Assume that renumbered receiving documents are not used in an organization that has attempted to automate much of the purchase and receiving function. What control objective is addressed by having...
-
Assume that in a household one parent currently works full time and the other stays at home to look after the family. How would you set about identifying and calculating the opportunity costs of the...
-
Why is it important to have a defined project scope? Why is it important to make sure there is agreement about the scope? Is there anything in the "Why Should You Use the WBS?
-
Reexamine Exercise 5.1. Assume that the capacity waste factors of the paralegals, tax lawyers, and senior partners are 20%, 30%, 35%, respectively. What is the theoretical capacity of the process?
-
The reservoir pressure of a supersonic wind tunnel is \(5 \mathrm{~atm}\). A static pressure probe is moved along the centerline of the nozzle, taking measurements at various stations. For these...
-
What the paralegals role is in the litigation process?
-
Bob Lutz opened a secretarial school called Best Secretarial Training. a. Lutz contributed the following assets to the business: Cash .............$5,700 Computers .......... 4,300 Office Equipment...
-
Assume at the end of year 10 the project is discontinued and sold for $5,000,000. Use an Excel spreadsheet to determine the cash flows from the project. Determine internal rate of return for the...
-
Roadrunner Bookstore uses the perpetual inventory system. Roadrunner Bookstore is owned by Tina Smith. The company had the following transactions for the month of September. Sep 1 Sep 2 Sep 4 Sep 5...
-
These financial statement items are for Oriole Company at year end, July 31, 2024. Salaries payable $2,150 Notes payable (long-term) $1,880 Salaries expense 47,800 Cash 14,000 Utilities expense...
-
The following is the trial balance of T. Owen as at 31 March 2016. Draw up a set of financial statements for the year ended 31 March 2016. Dr Cr Inventory: 1 April 2015 52,800 Sales 276,400 Purchases...
-
Imagineering, Inc., is considering an investment in CAD-CAM compatible design software with the cash flow profile shown in the table below. Imagineering's MARR is 18 percent/year. a. What is the...
-
The following is a summary of the petty cash transactions of Jockfield Ltd for May 2016: You are required to: (a) Rule up a suitable petty cash book with analysis columns for expenditure on cleaning,...
-
A sample of 20 registered voters was surveyed in which the respondents were asked, Do you think Chang, Johnson, Ohm, or Smith is most qualified to be a senator? The results of the survey are shown in...
-
You are to open the books of F. Polk, a trader, via the journal to record the assets and liabilities, and are then to record the dialy transactions for the month of May. A trial balance is to be...
-
1. Detail the key stages of the product life cycle. 2. How can a company prolong the life of a mature product? What actions should be taken to try to stem the products decline? 3. Give several...
-
Respond to the ethical judgments required based on the following scenarios. Scenario 1. Assume you have collected a sample using MUS and that you have evaluated that sample to calculate a total...
-
Using the supply schedule found in Table 3P-2, draw the daily supply curve for slices of pizza in a college town.
-
Which of the following situations are likely to involve adverse selection? a. After receiving an emergency call during class, a professor leaves students unsupervised for the rest of the period. b. A...
-
When shopping for your interview clothes, what are some trade-offs you face? What is the opportunity cost of buying new clothes? What are the benefits? How do you balance the two?
-
A common-size income statement for Liberty would report (amounts rounded) a. Net income of \(16 \%\) b. Cost of sales at \(36 \%\) c. Sales of \(100 \%\) d. All the above
-
During 2005 , Liberty's days' sales in receivables ratio was a. 39 day's b. 37 day's c. 35 day's d. 30 days
-
The company has 2,500 shares of common stock outstanding. What is Liberty's earnings per share? a. 2.04 b. 3.6 times c. \(\$ 1.22\) d. \(\$ 3.05\)
Study smarter with the SolutionInn App