Lmc retains 125000 of earnings in the business to finance


Larry is the sole owner of Larry's Moving Company, Incorporated (LMC). In one year, LMC collects $2,000,000 from customers to help them move. LMC's equipment depreciates in value by $200,000. LMC pays $1,400,000 to its workers, who pay $500,000 in taxes on this income. LMC pays $175,000 in corporate income taxes and pays Larry a dividend of 100,000. Larry pays taxes of $50,000 on this dividend income. LMC retains $125,000 of earnings in the business to finance future expansion. How much does this economic activity contribute to each of the following?

Solution Preview :

Prepared by a verified Expert
Business Economics: Lmc retains 125000 of earnings in the business to finance
Reference No:- TGS02658733

Now Priced at $10 (50% Discount)

Recommended (91%)

Rated (4.3/5)