1.1 The close corporation is taxed as a separate legal entity. True or False

1.2 A close corporation will pay tax on its profits at 45%. True or False

1.3 Interest on loan to members of a Close Corporation will have the following effect on the accounting equation when paid: Which one is correct?

	a.	Assets decrease; Owners' equity decreases;
	b.	Assets increase; Owners' equity decreases.
	c.	Assets increase; Owners' equity increases;
	d.	Assets decrease; Owners' equity increases;

1.4

Calculate the new member's interest of Smith if Redham buys another 10\% interest in the CC from Smith