Lawrence Corporation Reports the Following Results During the Current Year

question 36

Essay

Lawrence Corporation reports the following results during the current year: No dividends were paid in the throwback period.A long-term capital gain of $50,000 is included in taxable income.The statutory accumulated earnings tax exemption has been used up in prior years.An additional earnings accumulation of $60,000 for the current year can be justified as meeting the reasonable needs of the business.What is Lawrence Corporation's accumulated earnings tax liability?

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Definitions:

APC

This stands for Average Propensity to Consume, which is the percentage of income that an individual or population spends rather than saving.

APS

Average Propensity to Save; it is a macroeconomic term that represents the proportion of income that is saved rather than spent on consumption. It is calculated by dividing total savings by total income.

APC

Average Propensity to Consume, which is the fraction of income that a person or population spends rather than saving.

APS

The Average Propensity to Save, which is the proportion of total income that is saved rather than spent on consumption.