Humperdinck Inc, an organisation that investigates opportunities for potential investment has recently promoted you out of the mailroom. You have some experience in valuation having spent a summer internship at an investment bank. Your boss, easing you into the role, expects you provide an analysis of Hillock & Hummock Ltd, an Australian owned company.
Hillock and Hummock produced 2,500 marmot pelts in the past financial year which had an average selling price of $2,000. Variable costs are estimated at 70% of revenue, with an additional warehouse rent, wages and licences fixed at $750,000 for the year.
Hillock and Hummock have only one depreciable asset, initially purchased at $1,500,000 which they depreciate in a straight line to $0 over 10 years. They are currently still depreciating this asset.
Hillock and Hummock have an interest expense from the debt they hold of $50,000, and the applicable corporate tax rate is 20%
(a) Provide an income statement for Hillock and Hummock for the past financial year.
There are currently 1 million ordinary shares outstanding for Hillock and Hummock and they pay out 90% of their after tax earnings to investors.
(b) Identify Hillock and Hummock?s earnings per share, the dividend per share and the total amount, dollar amount, of dividends paid to shareholders.
The founder of the company, Mr. Glass, who is now retired, has no other income other than the revenue from his 300,000 Hillock and Hummock shares and is a resident of Australia. The dividends are expected to be fully franked.
(c) Determine the taxable income for Mr. Glass.
(d) Based on the tax rates provided below, determine the size of the refund or tax payable for Mr. Glass. Note: do not include the Medicare Levy or any other levies, offsets or rebates in your calculations.
$0 - $18,200
$18,201 - $37,000
$37,001 - $80,000
$80,001 - $180,000
Source: Australian Taxation Office, 2016
This question was answered on: Jan 30, 2021
Buy this answer for only: $15
This attachment is locked
We have a ready expert answer for this paper which you can use for in-depth understanding, research editing or paraphrasing. You can buy it or order for a fresh, original and plagiarism-free solution (Deadline assured. Flexible pricing. TurnItIn Report provided)
Pay using PayPal (No PayPal account Required) or your credit card . All your purchases are securely protected by .
About this QuestionSTATUS
Jan 30, 2021EXPERT
GET INSTANT HELP/h4>
We have top-notch tutors who can do your essay/homework for you at a reasonable cost and then you can simply use that essay as a template to build your own arguments.
You can also use these solutions:
- As a reference for in-depth understanding of the subject.
- As a source of ideas / reasoning for your own research (if properly referenced)
- For editing and paraphrasing (check your institution's definition of plagiarism and recommended paraphrase).
NEW ASSIGNMENT HELP?
Order New Solution. Quick Turnaround
Click on the button below in order to Order for a New, Original and High-Quality Essay Solutions. New orders are original solutions and precise to your writing instruction requirements. Place a New Order using the button below.
WE GUARANTEE, THAT YOUR PAPER WILL BE WRITTEN FROM SCRATCH AND WITHIN A DEADLINE.