Adam fleeman, a skilled carpenter, started a home improvement business with tom collins, a master plumber. adam and tom are concerned about the payroll taxes they will have to pay. assume they form an s corporation and each earns a salary of $106,000 from the corporation; in addition, they expect their share of business profits to be $62,500 each. how much social security tax and medicare tax (or self-employment tax) will adam, tom, and their corporation have to pay on their salary and profits? (assume adam and tom are paying themselves reasonable salaries.)

Sailcloth & more currently produces boat sails and is considering expanding its operations to include awnings for homes and travel trailers. the company owns land beside its current manufacturing facility that could be used for the expansion. the company bought this land 5 years ago at a cost of $319,000. at the time of purchase, the company paid $24,000 to level out the land so it would be suitable for future use. today, the land is valued at $295,000. the company has some unused equipment that it currently owns valued at $38,000. this equipment could be used for producing awnings if $12,000 is spent for equipment modifications. other equipment costing $490,000 will also be required. what is the amount of the initial cash flow for this expansion project?