Stock in Merlin Corporation is held equally by Jane, Eve, and Fred. Merlin seeks additional capital to buy a valuable tract of land that will cost $6,000,000 . Jane, Eve, and Fred propose to loan Merlin $2,000,000 each, taking from Merlin a $2,000,000
ten-year note with interest payable annually at five points above the prime rate. Merlin Corporation has current taxable income of $7,000,000 . How are the payments on the notes treated for tax purposes?
Payments on the notes will probably be treated as dividends for tax purposes. The debt instruments have too many features of stock. The debt does not bear a legitimate rate of interest, and the debt is proportionate to the stock holdings of Jane, Eve, and Fred. Merlin Corporation has substantial current taxable income indicating an attempt to withdraw earnings in the form of principal and interest payments on debt obligations rather than as dividends.
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On August 1 . a firm assigned $30,000 of its $56,000 of accounts receivable. The finance company advanced 90% of the assigned accounts less a $2,000 fee. Interest is 12% and payable monthly on the beginning-of-period loan balance. A loan payment is remitted at the end of each month. Each payment includes principal and interest. The amount of each loan payment equals the cash collected on
receivables during the month plus interest on the loan balance. If $8,000 was collected on accounts receivable during August, the entry for the first loan payment would include a a. debit to Interest Expense of $280. b. credit to Cash of $8,000. c. credit to Account Receivable Assigned of $8,000. d. debit to Notes Payable of $8,280.
A dentist’s office providing TVs for patients in the waiting room is an example of?
a. Keeping customers informed b. Designing a fair waiting system c. Keeping customers occupied d. Grouping customers together
The CAN-SPAM Act
a. applies to virtually all promotional e-mails, whether or not the sender has a pre-existing relationship with the recipient. b. requires senders of promotional e-mails to offer an opt-in system to recipients. c. requires recipients of unsolicited, pornographic e-mails to notify the Justice Department. d. requires senders of promotional e-mails to provide a valid return address, which may be a post office box or a specific physical location.
If a model can be applied successfully by people in all areas and levels of an organization, it is said to possess the trait of:
A) Capability. B) Ease of use. C) Flexibility. D) Realism.