On January 2, Chaz transfers cash of $60,000 to a newly formed corporation for 100% of the stock. In its initial year, the corporation has net income of $15,000. The income is credited to its earnings and profits account. The corporation distributes $5,000 to Chaz.

a. How do Chaz and the corporation treat the $5, 000 distribution?
b. Assume, instead, that Chaz transfers to the corporation cash of $30, 000 for stock and cash of $30, 000 for a note of the same amount. The note is payable in equal annual installments of $3, 000 each (beginning at the end of the corporation's initial year of operations) and bears interest at the rate of 6%. At the end of the year, the corporation pays an amount to meet this obligation. Determine the total amount of the payment and its tax treatment to Chaz and the corporation.

Ajewelry direct sales company pays its consultants based on recruiting new members. question 1 options: the company is running a pyramid scheme, which is illegal. the company is running a pyramid scheme, which is legal. the company has implemented a legal and ethical plan for growth. the company uses this method of compensation to reduce the fee for the product sample kit.

Stella company sells only two products, product a and product b. product a product b total selling price $50 $30 variable cost per unit $20 $10 total fixed costs $2,110,000 stella sells two units of product a for each unit it sells of product b. stella faces a tax rate of 40%. stella desires a net afterminustax income of $54,000. the breakeven point in units would be

He moto hotel opened for business on may 1, 2017. here is its trial balance before adjustment on may 31. moto hotel trial balance may 31, 2017 debit credit cash $ 2,283 supplies 2,600 prepaid insurance 1,800 land 14,783 buildings 72,400 equipment 16,800 accounts payable $ 4,483 unearned rent revenue 3,300 mortgage payable 38,400 common stock 59,783 rent revenue 9,000 salaries and wages expense 3,000 utilities expense 800 advertising expense 500 $114,966 $114,966 other data: 1. insurance expires at the rate of $360 per month. 2. a count of supplies shows $1,050 of unused supplies on may 31. 3. (a) annual depreciation is $2,760 on the building. (b) annual depreciation is $2,160 on equipment. 4. the mortgage interest rate is 5%. (the mortgage was taken out on may 1.) 5. unearned rent of $2,580 has been earned. 6. salaries of $810 are accrued and unpaid at may 31