Quinn's Proprietorship Earned $160,000 in Pre-Tax Profits This Year ACalculate the After-Tax Profits for the Business as I) a Not

question 8

Essay

Quinn's proprietorship earned $160,000 in pre-tax profits this year.Quinn does not require personal funds from the business.
Personal tax rates (federal plus provincial) in Quinn's province are:
(All rates are assumed for this question.)
The combined federal and provincial rate of tax for Canadian-controlled private corporations in Quinn's province is 13% on the first $500,000 of income.
Quinn has been considering incorporating the business.

Required:
A.Calculate the after-tax profits for the business as i) a proprietorship, and ii) a corporation.Show all calculations.
B.Name the type of tax planning that Quinn would be engaging in if the company was changed from a proprietorship to a corporation.
$\begin{array}{|l|r|}\hline \text { On the first } \$ 49,000 & 20 \% \\\hline \text { On the next } \$ 48,000 & 30 \% \\\hline \text { On the next } \$ 54,000 & 40 \% \\\hline \text { On the next } \$ 63,000 & 45 \% \\\hline \text { On income over } \$ 214,000 & 50 \% \\\hline\end{array}$
A.Calculate the after-tax profits for the business as i) a proprietorship, and ii) a corporation.Show all calculations.
B.Name the type of tax planning that Quinn would be engaging in if the company was changed from a proprietorship to a corporation.
A) After-tax profits as a proprietorship:
$\begin{array}{|l|r|r|}\hline\$ 160,000.00 & & \$ 160,000.00 \\\hline \text { Less Tax: } & & \\\hline 49.000 .00 & \times 20 \% & \$ 9,800.00 \\\hline 48,000.00 & \times 30 \% &\$ 14,400.00 \\\hline \$ 54,000.00 & \times 40 \% & \$ 21,600.00\\\hline\$ 9,000.00 & \times 45 \% &\$ 4,050.00 \\\hline \text { After-tax profits: } & & \$ 110,150.00 \\\hline\end{array}$ After-tax profits as a corporation:
$\begin{array}{|l|r|r|}\hline\$ 160,000.00 & & \$ 160,000.00 \\\hline \text { Less Tax: } && \\\hline \$ 160,000.00 & \times 13 \% & \$ 20,800.00\\\hline \text { After-tax profits: } & & \$ 139,200.00 \\\hline\end{array}$ B) Transferring income from one entity to another (individual to corporation)

• A) After-tax profits as a proprietorship:
• \(\begin{array}{|l|r|r|}
• \hline\$ 160,000.00 & & \$ 160,000.00 \\
• \hline \text { Less Tax: } & & \\
• \hline 49.000 .00 & \times 20 \% & \$ 9,800.00 \\
• \hline 48,000.00 & \times 30 \% &\$ 14,400.00 \\
• \hline \$ 54,000.00 & \times 40 \% & \$ 21,600.00\\
• \hline\$ 9,000.00 & \times 45 \% &\$ 4,050.00 \\
• \hline \text { After-tax profits: } & & \$ 110,150.00 \\
• \hline
• \end{array}\) After-tax profits as a corporation:
• \(\begin{array}{|l|r|r|}
• \hline\$ 160,000.00 & & \$ 160,000.00 \\
• \hline \text { Less Tax: } && \\
• \hline \$ 160,000.00 & \times 13 \% & \$ 20,800.00\\
• \hline \text { After-tax profits: } & & \$ 139,200.00 \\
• \hline
• \end{array}\) B) Transferring income from one entity to another (individual to corporation)

Discuss the importance of relationship development with constituencies and negotiation parties.

Understand how concerns about reputations influence negotiator behavior.

Evaluate factors affecting the effectiveness of communication through audiences.

Understand the key factors that build trust in relationships and negotiations.

---

Definitions:

Terms Of Trade

The ratio at which a country can trade its exports for imports from other countries, indicating the economic value of goods a country can procure through international trade.

Specializing

The process of focusing on and becoming an expert in a particular subject or skill, often leading to increased efficiency and productivity.

Maximum-Output

The highest level of production that a company can sustain over the long term without increasing its costs per unit of output.

Mutually Beneficial Exchange

An economic interaction where all parties involved gain or perceive a gain from the transaction.