For the taxation year ending December 31, 2020, Daly Inc. has Taxable Income, before consideration of...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
For the taxation year ending December 31, 2020, Daly Inc. has Taxable Income, before consideration of dividends or salary paid to its sole shareholder, of $34,500. The Company's cash balance, prior to the payment of any salary or dividends is $35,200. For the taxation year ending December 31, 2019, Daly Inc. had Net Income For Tax Purposes and Taxable Income of $12,700. The Company is subject to a combined federal/provincial tax rate of 11.5 percent on all of its Taxable Income for both 2019 and 2020. Bryan Daly, the sole shareholder of Daly Inc., has employment income of over $250,000, and because of this, any additional income will be taxed at a combined federal/provincial rate of 51 percent. The provincial dividend tax credit is equal to 20 percent of the gross up for non-eligible dividends. Mr. Daly has indicated that he would like to remove all of the $35,200 in cash from his Company and has asked you to determine whether it would be better to take it out in the form of all non-eligible dividends or all salary. For the taxation year ending December 31, 2020, Daly Inc. has Taxable Income, before consideration of dividends or salary paid to its sole shareholder, of $34,500. The Company's cash balance, prior to the payment of any salary or dividends is $35,200. For the taxation year ending December 31, 2019, Daly Inc. had Net Income For Tax Purposes and Taxable Income of $12,700. The Company is subject to a combined federal/provincial tax rate of 11.5 percent on all of its Taxable Income for both 2019 and 2020. Bryan Daly, the sole shareholder of Daly Inc., has employment income of over $250,000, and because of this, any additional income will be taxed at a combined federal/provincial rate of 51 percent. The provincial dividend tax credit is equal to 20 percent of the gross up for non-eligible dividends. Mr. Daly has indicated that he would like to remove all of the $35,200 in cash from his Company and has asked you to determine whether it would be better to take it out in the form of all non-eligible dividends or all salary.
Expert Answer:
Answer rating: 100% (QA)
The first step is to calculate the amount of tax that would be paid if Bryan Daly takes out all of t... View the full answer
Related Book For
Intermediate Accounting Volume 1
ISBN: 978-1119496496
12th Canadian edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy
Posted Date:
Students also viewed these accounting questions
-
For the taxation year ending December 31, 2018, George Glass had combined federal and provincial Tax Payable is $13,680. The corresponding figure for 2019 is $2,220. For the year ending December 31,...
-
For the taxation year ending December 31, 2020, Lorne Inc., a Canadian-controlled private company, has a Net Income for Tax Purposes of $340,500. This is made up of $312,400 of active business income...
-
For 2020 an individual had net income for tax purposes of $196,000 and Division C deductions of $18,000. During 2020 the individual had medical expenses of $7,900 and made charitable donations of...
-
Fewer than 20% of M&M candies are green. The hypothesis test results in a P-value of 0.0721. Assume a significance level of = 0.05 a. State a conclusion about the null hypothesis. b. Without using...
-
Researchers seek causal relationships by either experimental or ex post facto research designs. (a) In what ways are these two approaches similar? (b) In what ways are they different?
-
Of all the events that occur each day, how would you describe those that are recorded in a firm's accounting records?
-
Tom Bonacci brought his Jeep to Brewer Service Station to investigate a strange noise the vehicle was making. The Jeep was raised up on an automobile lift so that Brewer employee Paul Gebing could...
-
Outline a research design using observation for each of the following situations: a. A bank wishes to collect data on the number of customer services and the frequency of customer use of these...
-
You have been assigned to be the Data Architect at your company. Your company is trying to create a baseline governance process for multiple systems and you have been tasked with preparing a review...
-
The file Problem5_9.xlsx contains passing statistics for NFL teams during the 2017 season. Using formulas that do combine INDEX and MATCH in the same cell, return the desired statistics in the range...
-
Q.1) System Aim: To analyze, design the online limousine Reservation System in transportation Company System Description: Local Transport Services Company runs a limousine service that carries...
-
2 Solve for xo: v = vo + 2a(x-xo)
-
A string of linear mass density 2.25 g/m is stretched by the weight of an adjustable mass m as shown. Near the end of the string a vi- brator is attached at a constant but unknown frequency; the...
-
Derive the energy variance, (AE)2, of black body radiation from a black body of volume V at temperature T.
-
Three charged particles are located at the corners of an equilateral triangle as shown in the figure below (let q = 2.40 C, and L= 0.910 m). Calculate the total electric force on the 7.00-C charge....
-
Three vectors A, B, and C have x components of -9.0, -5.0, 1.0, respectively, and y components of -2.0, 1.0, 5.0, respectively. Find the magnitude of A + B + C. Submit Answer Incorrect. Tries 2/5...
-
1. On November 14, your company sold $24,000 worth of inventory to a customer for $60,000. You shipped it to the FOB shipping point and the terms were 3/15, n/30. The following day, the relevant...
-
A local politician is concerned that a program for the homeless in her city is discriminating against blacks and other minorities. The following data were taken from a random sample of black and...
-
Structured entities or variable interest entities (VIEs) have long been on the agendas of the financial accounting standard- setting communities. Recently, however, standards have been updated to...
-
The trial balance of Slum Dog Fashion Centre Inc., a private company following ASPE, contained the following accounts at November 30, the company?s fiscal year end: Adjustment data: 1. Supplies on...
-
Chessman Corporation factors $600,000 of accounts receivable with Liquidity Financing, Inc. on a with recourse basis. Liquidity Financing will collect the receivables. The receivable records are...
-
Personalized medicine may be used a. to characterize types of tumors. b. to predict the outcome of certain types of cancers. c. to determine the proper dosage of drugs. d. in all of the above.
-
Tumor-suppressor genes promote cancer when a. they are overexpressed. b. they are expressed in the wrong cell type. c. their function is inactivated. d. they are expressed at the wrong stage of...
-
A mutant gene that promotes cancer when it is overexpressed is called a. a tumor-suppressor gene. b. an oncogene. c. both a and b. d. neither a nor b.
Study smarter with the SolutionInn App