Little Corporation uses the accrual method of accounting. Little's sole shareholder, Renee, uses the cash method of accounting. Both taxpayers use the calendar year as their tax year. The corporation accrues a $25,000 interest payment to Renee on December 25, 2011 and makes the payment on March 10, 2012. What are the tax consequences of the transactions to both taxpayers in 2011 and 2012?
What will be an ideal response?
Little Corporation cannot deduct the interest in 2011, but must wait until Renee reports the income in 2012. There are no tax consequences to either taxpayer in 2011.
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One potential advantage of financing corporations through the use of bonds rather than common stock is
a. the interest on bonds must be paid when due b. the corporation must pay the bonds at maturity c. the interest expense is deductible for tax purposes by the corporation d. a higher earnings per share is guaranteed for existing common shareholders
In what ways is reverse logistics management more difficult than the management of more typical supply chain flows?
What will be an ideal response?
C.D. Jamison Co. is a wholesaler in Norfolk, Virginia. It carries a wide variety of merchandise from various producers-everything from bar soap and shampoo to cameras and stereo equipment-that is sold in retail stores on U.S. Navy bases and Navy ships. C.D. Jamison owns the products it resells and provides all the wholesaling functions. C.D. Jamison is a(n)
A. agent wholesaler. B. manufacturer sales branch. C. general merchandise wholesaler. D. specialty wholesaler. E. single-line wholesaler.
What do economists mean by pricing-to-market?
What will be an ideal response?