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Assume that pre-tax profit of $50,000 has been earned by a-(Answered)

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Assume that pre-tax profit of $50,000 has been earned by a business, and the owner/proprietor wants to withdraw all of the after-tax profit for personal use. Assume the tax rate for a C corporation is 34%, while the rate for a person is 27%. The after-tax earnings available under the corporate and proprietorship forms are:

a.

For a corporation, $33,000; for a proprietorship, $36,500

b.

For a corporation, $23,760; for a proprietorship, $36,500

c.

For either a corporation or a proprietorship, $36,500

d.

For either a corporation or a proprietorship, $23,760

 

Paper#9210580 | Written in 27-Jul-2016

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