Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Whirlwind Cycles is owned 100% by Daniel, a single taxpayer. Both Whirlwind Cycles and Daniel use the cash method of accounting for tax purposes. The
Whirlwind Cycles is owned 100% by Daniel, a single taxpayer. Both Whirlwind Cycles and Daniel use the cash method of accounting for tax purposes. The business incurred the following items of income and expense in the 2019: year Cash Sales $250,000 3,000 Interest received from City of Eugene Bonds Cost of Goods Sold (assume cash paid in 2019) 45,000 4,500 18,000 30,000 Cash payments for 2019 utilities Cash payments for 2019 rent (S1,500 per month) Tax depreciation Cash contribution to Clinton's campaign for President (not deductible for tax purposes) 1,000 On 1/1/2017 (two years ago) Whirlwind Cycles purchased a 60-month zero coupon bond with a 6% yield and a $30,000 maturity value for $22,418 (compounded annually) Daniel's marginal tax rate is 37% before any profits from the business are considered Calculate Daniel's 2019 after-tax cash flows from the business assuming the business is organized as a sole proprietorship and Daniel withdraws all after-tax cash flows from the business Daniel's 2019 after-tax cash flows
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started