Under an Imputation Tax System,what Will Be the Dividend After

question 47

Multiple Choice

Under an imputation tax system,what will be the dividend after tax on $500 of income generated by a company when 100 per cent of the after- tax income is paid out to the shareholder as a fully franked dividend and the shareholder's personal average tax rate is 35 per cent? The company tax rate is 30 per cent.

• A)$475
• B)$325
• C)$500
• D)$350

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Definitions:

Gain Contingencies

Possible gains or income that a business might receive, contingent upon future events that can't be predicted with certainty.

Footnotes

Supplementary notes at the bottom of financial statements providing additional detail about data or items on the statements.

Off-Balance-Sheet Financing

A form of financing in which companies do not record certain assets or liabilities on the balance sheet to improve financial ratios and maintain compliance with debt covenants.

Current Liability

This represents a company's debts or obligations that are expected to be paid off within a year, including accounts payable, short-term loans, and accrued expenses.