Lamri Co

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November 27, 2020 at 6:44 am #596630
akhila.vijay93
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Dear Sir,
In question part (a) while calculating the dividend capacity, why is Magnolia Co’s profit taxed again?
Only the dividend received by Lamri Co is needed to be taxed right?
Why do we tax the extra 6% on the entire $5400?
November 27, 2020 at 9:08 am #596646
John Moffat
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Note 3 in the question says that Lamri pays tax on the profits of subsidiary companies (profits, not dividends) but gives credit for tax already paid. (This is fairly standard tax practice – certainly for the exam.)
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