Like nondividend distributions, they are not paid out of the earnings and profits of the corporation.
For example, if you sold a stock for $1000 (inc selling fee) and paid $800 (inc buying fee), you would have a capital gains of $200.
Capital gains tax are subject to a 50% inclusion rate.
The trial balances for Plimsol Company and Shipping Corporation as of December 31, 20X8, follow: Required:1) Provide all eliminating entries required to prepare a full set of consolidated statements for 20X8.2) Prepare a three-part consolidation worksheet in good form as of December 31, 20X8.
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At that date, Standard Video reported total assets of $400,000, liabilities of $250,000, and stockholders' equity of $150,000. AACSB: Communication AICPA: FN Decision Making Bloom's: Understand Difficulty: 2 Medium Learning Objective: 02-01 Understand and explain how ownership and control can influence the accounting for investments in common stock. In the absence of other evidence, common stock ownership of 20 percent or more is viewed as indicating that the investor is able to exercise significant influence over the investee. Plimsol uses the cost method in accounting for its investment in Shipping.
Included in Standard's liabilities was an account payable to Beta in the amount of ,000, which Beta included in its accounts receivable. Based on the preceding information, what amount of total assets did Beta report in its balance sheet immediately after the acquisition? What are some of the other factors that could constitute evidence of the ability to exercise significant influence? Shipping's reported retained earnings of ,000 on the date of acquisition.When a company has more liabilities than assets, equity is negative and no liquidating distribution is made at all.This is usually the case in bankruptcy liquidations.On top of that, you should consult a tax professional before applying anything you read on my blog and the web in general. As you probably know, RRSP contributions and investment growth are taxable only upon withdrawal.At that point, the withdrawals are taxed as income at your marginal tax rate at the time.From investopedia.com: "Liquidating Dividend What Does Liquidating Dividend Mean?