Business Management Ch.6

A corporation with taxable earnings of $74,000 has a tax rate of 15%on the first $50,000 and a 25% tax rate on the next $25,000. The federal income taxes will amount to

$13,500

In order to form a Subchapter S corporation, what is the maximum number of stockholders that the firm can have?

100

In a recent year, corporate sales of goods and services were about

16 times more than sales from partnerships

Taxes that are unique to a corporation are

a filing fee, an organization tax, an annual state tax, and a federal income tax

An agreement that involves two or more businesses to provide a good or service is called

a joint venture

Net proceeds refer to the

cash received from the sale of all assets minus the payments of all debts

An official document giving power to run a corporation is a

charter

Which statement is true about obtaining money in corporations?

corporations can borrow money more easily than can partnerships

Corporations tend to be

few in number and large in size

People who invest in a corporation are

financially liable up to the amount originally invested

Shareholders of a corporation are often called

owners

The Tennessee Valley Authority is an example of a

quasi-public corporation

Unissued shares are the

shares that might be sold and used to expand the business at a later date

A virtual corporation

takes advantage of fast-changing market conditions

When an owner of a corporation dies,

the life of the corporation is not affected