Chapter 11. Growth, Profit and Return
With these transactions we will fast-forward through the rest of Apple-Seed’s first year in business. We will determine our profit for the year, compute the income taxes we owe, declare a dividend and issue our first Annual Report to Shareholders.
Taxes and dividends—one bad, one good? Actually, without taxes, there would be no dividends. Dividends are paid out of retained earnings. If the business has earnings (and can thus pay dividends), then it will have to pay taxes. Taxes with earnings; no taxes with no earnings. No earnings, then no dividends. Thus, no taxes, no dividends.
But enough of this. Some really exciting events are taking place at our now not-so-little company. We have attracted the attention ...
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