Answer:
Self employment tax liability = $22,323.97Additional Medicare tax liability = $0Explanation:
According to the IRS, the amount subject to self-employment tax is 92.35% of net income from self-employment for the year.
Alice's taxable income is:
= 92.35% * 196,000
= $181,006
Self employment tax-liability:
Social security tax for 2020 is 12.4% for the first $137,700 of income.
= 12.4% * 137,700
= $17,074.80
Medicare tax:
= 2.9% on taxable income
= 2.9% * 181,006
= $5,249.17
Self-employment tax is:
= 17,074.80 + 5,249.17
= $22,323.97
Additional Medicare tax applies on only amounts above $200,000 so it is $0 in this case.
On December 31, 2020, the Frisbee Company had 262,000 shares of common stock issued and outstanding. On March 31, 2021, the company sold 62,000 additional shares for cash. Frisbees net income for the year ended December 31, 2021, was $820,000. During 2021, Frisbee declared and paid $92,000 in cash dividends on its nonconvertible preferred stock. What is the 2021 basic earnings per share
Answer:
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Parliament Company, which expects to start operations on January 1, year 2, will sell digital cameras in shopping malls. Parliament has budgeted sales as indicated in the following table. The company expects a 10 percent increase in sales per month for February and March. The ratio of cash sales to sales on account will remain stable from January through March.
Required:
Determine the amount of sales revenue Parliament will report on its first quarter pro forma income statement.
Answer:
Note: The complete question is attached as picture below
We are add the previous month +10% to get that month's amounts
Sales Budget
January February March
Cash sales $50,000 $55,000 $60,500
Credit sales $120,000 $132,000 $145,200
Total sales $170,000 $187,000 $205,700
Workings:
February
Cash sales = 50,000+(50,000*10%) = $55,000
Credit sales= 120,000+(120,000*10%) = $132,000
March
Cash sales = 55,000+(55,000*10%) = $60,500
Credit sales= 132,000+(132,000*10%) = $145,200
Here we have added the previous month +10% to get that month's amounts
So,
Sales Budget
January February March
Cash sales $50,000 $55,000 $60,500
Credit sales $120,000 $132,000 $145,200
Total sales $170,000 $187,000 $205,700
Workings note
For FebruaryCash sales = 50,000 + (50,000 ×10%)
= $55,000
Credit sales= 120,000+(120,000 × 10%)
= $132,000
For March
Cash sales = 55,000+(55,000 × 10%)
= $60,500
Credit sales= 132,000+(132,000 × 10%)
= $145,200
In this way, the amount should be determined.
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Michelle is an active participant in the rental condominium property she owns. During the year, the property generates a ($17,500) loss; however, Michelle has sufficient tax basis and at-risk amounts to absorb the loss. If Michelle has $120,000 of salary, $10,500 of long-term capital gains, $3,500 of dividends, and no additional sources of income or deductions, how much loss can Michelle deduct?
Answer: $8,000
Explanation:
A special rule allows Michelle to classify up to $25,000 as losses against her nonpassive income.
If Michelle's modified adjusted gross income (MAGI) exceeds $100,000 however, the amount that exceeds the $100,000 will be reduced by 50% and deducted from the exemption allowed.
Loss deduction = Exemption allowed - [(Nonpassive income - MAGI limit) * 50%)
= 25,000 - [ (120,000 + 10,500 + 3,500 - 100,000) * 50%]
= $8,000
The following are budgeted data: January February March Sales in units 16,900 23,800 19,900 Production in units 19,900 20,900 20,000 One pound of material is required for each finished unit. The inventory of materials at the end of each month should equal 25% of the following month's production needs. Purchases of raw materials for February would be budgeted to be:
Answer:
Purchases= 20,675 pounds
Explanation:
Giving the following information:
Production:
Feb= 20,900
Mar= 20,000
One pound of material is required for each finished unit.
Desired ending inventory= 25% of the following month's production needs.
To calculate the purchase required for February, we need to use the following formula:
Purchases= production + desired ending inventory - beginning inventory
Purchases= 20,900 + (20,000*0.25) - (20,900*0.25)
Purchases= 20,675
Question 13 of 20
Todd's manager has asked him to write a report on ways to increase safety in
the warehouse. Todd used the Internet to research statistics and
recommendations for improving safety in the workplace. He feels like he
pulled together a really strong document and that his manager will be
pleased. However, when he is called into his manager's office, his manager is
concerned and tells him that he has been unethical in his work. What did
Todd do?
A. He likely used the Internet for research, and violated company
confidentiality rules.
B. He likely did not cite his research, and committed plagiarism.
C. He likely told his co-workers he was writing a report, and violated
co-worker's privacy.
D. He likely completed the report on time, and likely violated
company honesty policy
Answer:
he answer is : He likely did not cite his research, and committed plagiarism. Todd's manager has asked him to write a report on ways to increase safety in the warehouse. Todd used the Internet to research statistics and recommendations for improving safety in the workplace. He feels like he pulled together a really strong document and that his manager will be pleased. However, when he is called into his manager's office, his manager is concerned and tells him that he has been unethical in his work. He likely did not cite his research, and committed plagiarism. It is the practice of taking someone else's work or ideas and passing them off as one's own.
Explanation:
David Pharma and Albritton Electronics have invested together to create a new (third) organization with 50%/50% ownership, to focus on developing diagnostic devices in Flagstaff, AZ. Through this new firm, both companies are attempting to combine their core competencies to innovate and reduce their risks associated with transaction-specific investments. The new firm operates independent of David Pharma and Albritton Electronics. Which of the following market entry (i.e., growth) strategies does this scenario best illustrate?
A. a joint venture
B. a franchisee
C. a licensing contract
D. a corporate acquisition
Answer:
A. a joint venture
Explanation:
Since in the question it is mentioned that David Pharma and Albritton Electronics invested together and want to establish a new organization having 50% ownership each also both companies are atttempting for innovate and decrease the risk so the strategy that fit to the given case is the joint venture
hence, the option a is correct
Determining Amounts to be Paid on Invoices Determine the amount to be paid in full settlement of each of the following invoices, assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period. Merchandise Freight Paid by Seller Terms Returns and Allowances a. $14,200 - FOB shipping point, 1/10, n/30 $700 b. 10,700 $400 FOB shipping point, 2/10, n/30 1,300 c. 5,700 - FOB destination, 1/10, n/30 500 d. 3,800 200 FOB shipping point, 2/10, n/30 500 e. 1,500 - FOB destination, 2/10, n/30 -
Answer:
a. Amounts to be Paid on Invoice = $12,150
b. Amounts to be Paid on Invoice = $7,920
c. Amounts to be Paid on Invoice = $4,680
d. Amounts to be Paid on Invoice = $2,840
e. Amounts to be Paid on Invoice = $1,200
Explanation:
a. $14,200 - FOB shipping point, 1/10, n/30 $700
Amounts to be Paid on Invoice = ($14,200 - $700) * (10/10 - 1/10) = $12,150
b. 10,700 $400 FOB shipping point, 2/10, n/30 1,300
Amounts to be Paid on Invoice = (($10,700 - $1,300) * (10/10 - 2/10)) + $400 = $7,920
c. 5,700 - FOB destination, 1/10, n/30 500
Amounts to be Paid on Invoice = ($5,700 - $500) * (10/10 - 1/10) = $4,680
d. 3,800 200 FOB shipping point, 2/10, n/30 500
Amounts to be Paid on Invoice = (($3,800 - $500) * (10/10 - 2/10)) + $200 = $2,840
e. 1,500 - FOB destination, 2/10, n/30 -
Amounts to be Paid on Invoice = $1,500 * (10/10 - 2/10) = $1,200
Texas Roadhouse opened a new restaurant in October. During its first three months of operation, the restaurant sold gift cards in various amounts totaling $1,800. The cards are redeemable for meals within one year of the purchase date. Gift cards totaling $728 were presented for redemption during the first three months of operation prior to year-end on December 31. The sales tax rate on restaurant sales is 4%, assessed at the time meals (not gift cards) are purchased. Texas Roadhouse will remit sales taxes in January.
Required:
a. Record (in summary form) the $2,500 in gift cards sold ( keeping in mind that, in actuality the firm would record each sale of a gift card individually ).
b. Record the $728 in gift cards redeemed, including the 4% sales tax assessed.
c. Determine the balance in the Unearned Revenue account ( remaining liability for gift cards ) Texas Roadhouse will report on the December 31 balance sheet.
Answer:
General Journal Debit Credit
1 Cash 2600
Unearned revenue 2600
(To record gift cards sold)
2 Unearned revenue 832
Sales tax payable 32
Sales revenue 800
(To record gift cards redeemed)
Able conveyed real property in Michigan to Baker in a correctly draft and signed deed. Baker accurately and immediately recorded the deed with the appropriate county offices. After the recording of the deed, Able accepted money from Charlie and signed a new deed for the same property purporting to convey the property to Charlie. Charlie had not been told of the earlier transfer to Baker. In a dispute between Baker and Charlie, which of the following statements is most accurate.
A. Charlie will prevail over Baker because the deed from Able to Baker fails
B. Charlie will prevail over Baker because Charlie paid money to Able
C. Baker will prevail over Charlie because Baker recorded the deed before a Charlie paid Able for the property
D. Baker will prevail over Charlie, unless Able told Charlie of the prior transfer to Baker since that would have been his obligation
Answer: C. Baker will prevail over Charlie because Baker recorded the deed before a Charlie paid Able for the property.
Explanation:
As soon as Baker accurately and immediately recorded the deed with the appropriate county offices after the property was conveyed to him, he took over ownership of the property from Able.
Able received money from Charlie and signed a new deed after this had happened so Baker would prevail because Baker, not Able, owns the property and so Able cannot sell what does not belong to him.
Since Baker registered the deed when Charlie paid Able for the land, he will triumph over Charlie.
Title has been transmitted to Baker since Able ceded real property to Baker in a properly drafted and executed deed that was documented with the relevant county agencies. Able has no rights to the land after transfer, thus he can't transmit something that doesn't belong to him.
So, Option "C" is the correct answer to the following question.
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On January 1, 20X1, the Dallas Auto Parts Company acquired nine identical assembly robots for a total of $594,000 cash. The robots had an expected useful life of 10 years and an expected residual value of $54,000 in total. Dallas uses straight-line depreciation.
1. Set up T-accounts and prepare the journal entries for the acquisition and for the first annual depreciation charge. Post to T-accounts.
B. On December 31, 20X3, Dallas sold one of the robots for $40,000 in cash. The robot had an original cost of $66,000 and an expected residual value of $6,000. Prepare the journal entry for the sale. Refer to requirement
2. Suppose Dallas had sold the robot for $62,000 cash instead of $40.000. Prepare the journal entry for the sale.
Answer:
Dallas Auto Parts Company
1. T-accounts and journal entries for the acquisition and first annual depreciation charge:
Journal Entries:
Jan. 1, 20X1:
Debit Assembly Robots (Equipment) $594,000
Credit Cash $594,000
To record the acquisition of nine identical robots.
Dec. 31, 20x1:
Debit Depreciation Expense $54,000
Credit Accumulated Depreciation $54,000
To record the depreciation expense for the first year.
Assembly Robots (Equipment)
Date Account Titles Debit Credit
Jan. 1, 20X1 Cash $594,000
Cash
Date Account Titles Debit Credit
Jan. 1, 20X1 Assembly Robots (Equipment) $594,000
Depreciation Expense
Date Account Titles Debit Credit
Dec. 31, 20X1 Accumulated Depr. $54,000
Accumulated Depreciation - Equipment
Date Account Titles Debit Credit
Dec. 31, 20X1 Depreciation Expense $54,000
B. Journal Entries for the sale of one robot for $40,000 cash.
December 31, 20X1:
Debit Cash $40,000
Credit Sale of Equipment $40,000
To record the sale of one robot for cash.
Debit Accumulated Depreciation $18,000
Credit Sale of Equipment $18,000
To transfer the accumulated depreciation to the sale of equipment account.
Debit Sale of Equipment $66,000
Credit Equipment $66,000
To transfer the equipment account to the sale of equipment.
Debit Loss from Sale of Equipment $8,000
Credit Sale of Equipment $8,000
To record the loss from sale of equipment.
2. Journal Entries for the sale of the robot for $62,000 cash:
December 31, 20X1:
Debit Cash $62,000
Credit Sale of Equipment $62,000
To record the cash receipts from sale of equipment.
Debit Accumulated Depreciation $18,000
Credit Sale of Equipment $18,000
To transfer the accumulated depreciation to the sale of equipment.
Debit Sale of Equipment $66,000
Credit Equipment $66,000
To transfer the equipment account to the sale of equipment.
Debit Sale of Equipment $14,000
Credit Gain from sale of Equipment $14,000
To record the gain from the sale of equipment.
Explanation:
a) Data and Calculations:
Cost of nine assembly robots = $594,000
Unit cost of a robot = $66,000 ($594,000/9)
Expected useful life = 10 years
Expected residual value = $54,000
Unit residual value = $6,000 ($54,000/9)
Depreciable amount for each robot = $60,000 ($66,000 - $6,000)
Straight-line annual depreciation expense = $6,000 ($60,000/10)
Sale of one robot for $40,000 cash:
Accumulated depreciation for one robot on December 31, 20x3 = $18,000
Net book value = $48,000 ($66,000 - $18,000)
Cash $40,000 Sale of Equipment $40,000
Accumulated Depreciation $18,000 Sale of Equipment $18,000
Sale of Equipment $66,000 Equipment $66,000
Loss from Sale of Equipment $8,000 Sale of Equipment $8,000
Sale of one robot for $62,000
Accumulated depreciation for one robot on December 31, 20x3 = $18,000
Net book value = $48,000 ($66,000 - $18,000)
Cash $62,000 Sale of Equipment $62,000
Accumulated Depreciation $18,000 Sale of Equipment $18,000
Sale of Equipment $66,000 Equipment $66,000
Sale of Equipment $14,000 Gain from sale of Equipment $14,000
Two years ago, Kimberly became a 30 percent partner in the KST Partnership with a contribution of investment land with a $10,000 basis and a $16,000 fair market value. On January 2 of this year, Kimberly has a $15,000 basis in her partnership interest, and none of her pre-contribution gain has been recognized. On January 2 Kimberly receives an operating distribution of a tract of land (not the contributed land) with a $12,000 basis and an $18,000 fair market value.
a. What is Kimberly’s remaining basis in KST after the distribution?
b. What is KST’s basis in the land Kimberly contributed after Kimberly receives this distribution?
Answer:
A. $6,000
B. $13,000
Explanation:
A. Calculation to determine Kimberly’s remaining basis in KST after the distribution
Basis in KST$ 15,000
Add §737 gain $3,000
($15,000-$12,000)
Deduct Carryover basis in land ($12,000)
Remaining basis in KST $6,000
($15,000+$3,000-$12,000).
Therefore Kimberly’s remaining basis in KST after the distribution will be $6,000
B. Calculation to determine KST’s basis in the land Kimberly contributed after Kimberly receives this distribution
KST basis upon contribution $10,000
Add Kimberly’s §737 gain $3,000
($15,000-$12,000)
KST’s basis in land $13,000
($10,000+$3,000)
Therefore KST’s basis in the land Kimberly contributed after Kimberly receives this distribution is $13,000
Prepare summary journal entries to record the following transactions and events a through g for a company in its first month of operations.
a. Raw materials purchased on account, $92,000.
b. Direct materials used in production, $40,000. Indirect materials used in production, $25,000.
c. Paid cash for factory payroll, $65,000. Of this total, $45,000 is for direct labor and $20,000 is for indirect labor.
d. Paid cash for other actual overhead costs, $7,750.
e. Applied overhead at the rate of 120% of direct labor cost.
f. Transferred cost of jobs completed to finished goods, $69,000.
g. Jobs that had a cost of $69,000 were sold.
h. Sold jobs on account for $98,000.
Answer:
Journal Entries:
a. Debit Raw materials $92,000
Credit Accounts payable $92,000
To record the purchase of raw materials on account.
b. Debit Work-in-Process $40,000
Debit Manufacturing overhead $25,000
Credit Raw materials $65,000
To record direct and indirect materials.
c. Debit Payroll Expense $65,000
Credit Cash $65,000
To record the payment of payroll.
Debit Work-in-Process $45,000 (direct labor)
Debit Manufacturing overhead $20,000 (indirect labor)
Credit Payroll Expenses $65,000
To record the payment of direct and indirect labor.
d. Debit Manufacturing overhead $7,750
Credit Cash $7,750
To record the payment for other overhead costs.
e. Debit Work-in-Process $54,000
Credit Manufacturing overhead $54,000
To record overhead applied at the rate of 120% of direct labor cost.
f. Debit Finished goods $69,000
Credit Work-in-Process $69,000
To record the transfer of completed jobs to finished goods inventory.
g. Debit Cost of goods sold $69,000
Credit Finished goods $69,000
To record the cost of goods sold.
h. Debit Accounts receivable $98,000
Credit Sales revenue $98,000
To record the sale of goods on account.
Explanation:
a. Raw materials $92,000 Accounts payable $92,000
b. Work-in-Process $40,000 Manufacturing overhead $25,000 Raw materials $65,000
c. Payroll Expense $65,000 Cash $65,000 Work-in-Process $45,000 (direct labor) Manufacturing overhead $20,000 (indirect labor) Payroll Expenses $65,000
d. Manufacturing overhead $7,750 Cash $7,750
e. Work-in-Process $54,000 Manufacturing overhead $54,000 (at the rate of 120% of direct labor cost)
f. Finished goods $69,000 Work-in-Process $69,000
g. Cost of goods sold $69,000 Finished goods $69,000
h. Accounts receivable $98,000 Sales revenue $98,000
2. Shell Biotech Corporation is considering two mutually exclusive capital investment projects. Project 1 costs $75,000, and would produce annual cash flows of $16,200 for each of the next 9 years. Project 2 also costs $75,000, but would produce annual cash flows of $14,000 for each of the next 12 years. If Shell's cost of capital is 11%, which alternative should be chosen
Answer:
Project 2
Explanation:
The better alternative can be determined by calculating the npv
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
Project 1
Cash flow in year 0 = $-75,000
Cash flow each year fromyear 1 to 9 = $16,200
I = 11%
NPV = 14,700.17
Project 2
Cash flow in year 0 = $-75,000
Cash flow each year fromyear 1 to 12 = $14,000
I = 11%
NPV = 15,892.99
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Three major transportation segments and a major company within each segment are as follows:
Segment Company Motor carriers YRC Worldwide Inc. (YRCW) Railroads Union Pacific Corporation (UNP) Transportation Arrangement C.H. Robinson Worldwide Inc. (CHRW) YRC Worldwide Union Pacific C.H. Robinson Worldwide Sales $4,832 $21,813 $13,470 Average long-term operating assets 1,016 47,569 1,092
a. Determine the asset turnover for all three companies. Round to two decimal places.
YRC Worldwide ________
Union Pacific _______
C.H. Robinson Worldwide ______
b. Based on your calculations above which of the following statements are correct.
Answer:
Segment Company Motor
a) The asset turnover ratios for all three companies. Round to two decimal places are:
YRC Worldwide ___4.76_____
Union Pacific ___0.46____
C.H. Robinson Worldwide __12.34____
b) Based on the Asset Turnover Ratio computed above, Transportation Arrangement is the most efficient. It outperformed YRC Worldwide and Union Pacific Corporation in deploying assets to generate revenue. The performance of Union Pacific Corporation in comparison is very abysmal.
Explanation:
a) Data and Calculations:
YRC Worldwide Railroads Union Transportation
Inc. (YRCW) Pacific Corporation Arrangement C.H.
(UNP)
Sales $4,832 $21,813 $13,470
Average long-term
operating assets 1,016 47,569 1,092
Asset turnover = Sales/Average operating assets
= 4.76 0.46 12.34
The effect on existing deferred income tax accounts when a change in the tax rate is enacted into law should be Group of answer choices reported as an adjustment to income tax expense in the period of change. applied to all temporary or permanent differences that arise prior to the date of the enactment of the tax rate change, but not subsequent to the date of the change. The tax change should be ignored until the year it is enacted. considered, but it should only be recorded in the accounts if it reduces a deferred tax liability or increases a deferred tax asset.
Answer:
Reported as an adjustment to income tax expense in the period of change
Explanation:
The deferred tax expense is generally defined as an increase in balance of deferred tax liability minus the increase in balance of deferred tax asset. It is an increase in the deferred tax liability balance usually from the beginning to the end of the accounting period.
The taxable income of a corporation is simply different from accounting income due to the fact that companies use the full accrual method for financial reporting but use the modified cash basis for tax reporting.
Tax is commonly defined as an involuntary charge imposed by the government to provide revenue for government which are use for development of public institution,roads and others. Tax laws are enacted to regulate, monitor payment of tax.
To support herself while attending school, Daun Deloch sold stereo systems to other students. During the first year of operations, Daun purchased the stereo systems for $200,000 and sold them for $310,000 cash. She provided her customers with a one-year warranty against defects in parts and labor. Based on industry standards, she estimated that warranty claims would amount to 3 percent of sales. During the year, she paid $3,420 cash to replace a defective tuner.
Required:
Prepare an income statement and statement of cash flows for Daun's first year of operation. Based on the information given, what is Daun's total warranties liability at the end of the accounting period?
Answer:
See below
Explanation:
•Income statement for Daun's first year of operation
Sales revenue
$310,000
Less;
Cost of goods sold
($200,000)
Gross profit
$110,000
Less:
Warranty expense
($9,300)
Net income
$100,700
• Statement of cash flow for Daun's first year of operation
Collection from customers
$310,000
Less:
Paid to suppliers
($200,000)
Warranty payment
($3,420)
Net Cash flow
$106,580
• Daun's Warranty liability/Expense at the end of the accounting period.
= $310,000 × 3%
= $9,300
Turrubiates Corporation makes a product that uses a material with the following standards:
Standard quantity 8.4 liters per unit
Standard price $2.90 per liter
Standard cost $24.36 per unit
The company budgeted for production of 4,200 units in April, but actual production was 4,300 units. The company used 37,000 liters of direct material to produce this output. The company purchased 20,500 liters of the direct material at $3.0 per liter. The direct materials purchases variance is computed when the materials are purchased.
The materials quantity variance for April is:__________
Answer:
the materials quantity variance for April is $2,552 unfavorable
Explanation:
The computation of the materials quantity variance for April is shown below:
= (standard quantity - actual quantity) × standard rate
= (4,300 units × 8.4 liters - 37,000 liters) × $2.90
= (36,120 liters - 37,000 liters) × $2.90
= 880 liters × $2.90
= $2,552 unfavorable
hence, the materials quantity variance for April is $2,552 unfavorable
The same is followed
You make component X in-house at a cost of $16 per unit, which consists of $2 direct labor per unit, $7 direct materials per unit, $2 fixed overhead per unit, and $5 variable overhead per unit. You need 1,000 units of X per month. An outside supplier has offered to sell component X to you at $12 per unit. If you outsource the production of X to the supplier, how much will your profit change in the short term
Answer:
Change in profit is Nil
Explanation:
To determine whether to outsource the production of product X or not, we would compare the variable cost internal production to the external purchase price. And then adjust the net figure for the fixed costs.
For a make or buy decision the relevant cash flows include
1. the differential variable cost of the two options
2. savings from avoidable fixed costs associated with internal production
$
Variable cost internal production (2+7+5) 14
External buy in price 12
Savings per unit of bought from outside 2
Savings on 1000 units (2× 1,000) 2,000
Unavoidable fixed cost (2 × 1,000) (2,000)
Net change in profit Nil
Note we assume that the fixed overhead is unavoidable. That is it will still be incurred whether or the product is outsourced
On November 4, 2018, Blue Company acquired an asset (27.5-year residential real property) for $200,000 for use in its business. In 2018 and 2019, respectively, Blue took $642 and $5,128 of cost recovery. These amounts were incorrect; Blue applied the wrong percentages (i.e., those for 39-year rather than 27.5-year property). Blue should have taken $910 and $7,272 of cost recovery in 2018 and 2019, respectively. On January 1, 2020, the asset was sold for $180,000. If required, round all computations to the nearest dollar.
a. The adjusted basis of the asset at the end of 2017 is $.
b. The cost recovery deduction for 2018 is $.
c. The__________ on the sale of the asset in 2018 is $
Answer:
A. $191,818
B. $303
C. $11,515 loss
Explanation:
A) Calculation to determine what The adjusted basis of the asset at the end of 2017 is
2017 Asset's cost $200,000
Less recovery costs for 2017 and 2018
($910 + $7,272 = $8,182
December 31, 2018 $191,818
($200,000 - $8,182)
Therefore The adjusted basis of the asset at the end of 2017 is $191,818
B) Calculation to determine what The cost recovery deduction for 2018 is
Recovery cost = $200,000 x (1 / 27.5) x (0.5 / 12)
Recovery cost = $200,000 x3.636% × .5/12)
Recovery cost = $303
Therefore The cost recovery deduction for 2018 is $303
C) the asset's basis on the date of sale is = $191,818 - $303 = $191,515
Sales price - asset basis = $180,000 - $191,515 = $11,515 loss
Blue Company lost $11,515 when it sold the asset.
$.
c. The__________ on the sale of the asset in 2018 is $
A reconciliation of Zack's Company's pretax accounting income with its taxable income for 2018, its first year of operations, is as follows: Pretax accounting income $3,000,000 Excess tax depreciation (150,000) Taxable income $2,850,000 The excess tax depreciation will result in equal net taxable amounts in each of the next three years. Enacted tax rates are 40% in 2018, 35% in 2019 and 2020, and 30% in 2021. The total deferred tax liability to be reported on Charles's balance sheet at December 31, 2018, is
Answer:
the total deferred tax liability is $50,000
Explanation:
The computation of the total deferred tax liability is shown below:
Tax Depreciation 2019 $17500 {[$150000 ÷ 3] × 35%}
Tax Depreciation 2020 $17500 {[$150000 ÷ 3] × 35%}
Tax Depreciation 2021 $15000 {[$150000 ÷ 3] × 30%}
Total Deferred Tax Liability $50,000
Hence, the total deferred tax liability is $50,000
Wozniacki and others form Jewel LLC, with each receiving a one-fifth interest in the capital and profits of the LLC. Wozniacki receives his one-fifth interest as compensation for tax planning services he rendered prior to the formation of the LLC. The other partners each contribute $245,675 cash. The value of a one-fifth capital interest in the LLC (for each of the parties) is $245,675.
a. How much income does Wozniacki recognize as a result of this transaction, and what is the character of the income?
b. How much is Wozniacki’s basis in the LLC interest?
c. How will Jewel treat this amount?
Answer:
A. $245,675 Compensation Income
B. $245,675
C. Business deduction or the company startup
expenditure Amount
Explanation:
A. Based on the information given we were told that the Cash amount of $245,675 which is one-fifth interest was received as the amount of compensation for tax planning services that was rendered by him prior to the formation of the LLC which means that the amount of income he recognize as a result of this transaction is the amount of $245,675 and the character of the income is COMPENSATION INCOME
B. Based on the information given the amount of his BASIS in the LLC interest will be the one-fifth interest amount of $245,675
C. Based on the information given Jewel will treat this amount as either the company business deduction or the company startup expenditure amount.
Round Hammer is comparing two different capital structures: An all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would have 175,000 shares of stock outstanding. Under Plan II, there would be 125,000 shares of stock outstanding and $2.23 million in debt outstanding. The interest rate on the debt is 8 percent and there are no taxes.
a. Use M&M Proposition I to find the price per share. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
b. What is the value of the firm under each of the two proposed plans? (Do not round intermediate calculations and round your answers to the nearest whole dollar amount, e.g., 32.)
Answer:
A) total debt = $2,230,000 and it represents 175,000 - 125,000 = 50,000 outstanding shares
price per share = $2,230,000 / 50,000 = $44.60 per share
B) enterprise value = 175,000 x $44.60 = $7,805,000
According to M&M proposition I, the enterprise value is the same with or without any outstanding debt. So the company's value is the same for both alternatives.
The major benefits to a S.W.O.T Analysis are: a. Simple to use. b. Reduces the costs of strategic planning. c. Flexible. d. Integrates and synthesizes diverse information. e. Fosters collaboration among managers of different functional areas. f. ALL OF THE ABOVE. g. NONE OF THE ABOVE.
Answer:
f. ALL OF THE ABOVE
Explanation:
SWOT analysis can be regarded as
strategic planning technique that is been utilized to identify opportunities,
strengths as well as weaknesses, and threats associated with business competition as well as project planning of individuals or organization.
The major benefits to a S.W.O.T Analysis includes
✓Reduces the costs of strategic planning.
✓Simple to use.
✓Flexible
✓Fosters collaboration among managers of different functional areas.
✓Integrates and synthesizes diverse information.
1. Caleb owns a used book shop, charging $8 for each used book that he sells. It costs him $3.50 for each used book and $0.16 per bag. In addition, he spends $1150 on rent, $92 on electricity, and $2240 on labor costs each month. Analyze Caleb's business by answering the following questions. (5 points: Part I - 1 point; Part II - 1 point; Part III - 1 point; Part IV - 1 point; Part V - 1 point) Part I: What is Caleb's unit cost per used book that he sells
Answer: $3.66 per book
Explanation:
Every book that Caleb sells costs him $3.50 and he puts it in a bag that costs $0.16.
Units cost per used book is therefore:
= Unit cost of book + bag cost
= 3.50 + 0.16
= $3.66 per book
A stock is expected to pay a dividend of $1.00 at the end of the year (i.e., D1 = $1.00), and it should continue to grow at a constant rate of 4% a year. If its required return is 15%, what is the stock's expected price 3 years from today? Round your answer to two decimal places. Do not round your intermediate calculations.
Answer:
$10.23
Explanation:
The constant growth dividend model can be used to determine the value of the stock
according to the constant dividend growth model
price = d1 / (r - g)
d1 = next dividend to be paid
r = cost of equity
g = growth rate
Dividend price in 3 years = D x (1 + g)^t
g = growth rate = 4%
t = time = 3
d = dividend = 1
$1 x (1.04)^3 = 1.124864
price = $1.124864 / (0.15 - 0.04) = $10.23
Stoney Brook Company produces two products (X and Y) from a joint process. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities, and production costs of further processing are entirely variable and traceable to the products involved. Joint manufacturing costs for the year were $60,000. Sales values and costs were as follows: If Processed Further Product Units Made Sales Price at Split-Off Sales Value Separable Cost X 9,000 $ 40,000 $ 78,000 $ 10,500 Y 6,000 80,000 90,000 7,500 If the joint production costs are allocated based on the net-realizable-value method, the amount of joint cost assigned to product Y would be:
Answer:
Apportioned joint cost to Product Y = $33,000
Explanation:
The net realizable sales value is the difference between the sales value less the separable cost.
Apportioned joint cost
= applicable net realizable value /Total net realizable value × Joint costs
$
Net-realizable value
Product X = 78,000-10500= 67,500
Product Y = 90,000-7500= 82,500
Total net-releasable value 150,000
Apportioned joint cost:
Product Y=82500/150,000× $60,000= $ 33,000
Product Y = $33,000
Lease M does not contain a purchase option, but the present value of the lease payments is equal to 91% of the fair value of the leased asset. Lease P does not transfer ownership to the lessee by the end of the lease term, but the lease term is equal to 77% of the estimated economic life of the leased asset. How should the lessee classify these leases
Answer:
Lease M → Finance Lease Lease P → Finance LeaseExplanation:
An operating lease is one where the leasee simply pays rental for the asset. A finance lease on the other hand, has ownership attributes even though ownership is not transferred.
According to U.S. GAAP provisions, a lease is a finance lease if the lease term in more than 75% of the estimated economic life of the leased asset and seeing as this is the case for both Lease M and P, they are both finance leases.
Reuse of large amounts of copyrighted film in a documentary would not constitute a copyright infringement.
a) True
b)False
Answer:
B. False
Explanation:
I majored in Business
Storm Tools has formed a new business unit to produce battery-powered drills. The business unit was formed by the transfer of selected assets and obligations from the parent company. The unit's initial balance sheet on January 1 contained cash ($500,000), plant and equipment ($2,500,000), notes payable to the parent ($1,000,000), and residual equity ($2,000,000).
The business unit is expected to repay the note at $50,000 per month, plus all accrued interest at 1/2% per month. Payments are made on the last day of each month.
The unit is scheduled to produce 25,000 drills during January, with an increase of 2,500 units per month for the next three months. Each drill requires $40 of raw materials. Raw materials are purchased on account, and paid in the month following the month of purchase. The plant manager has established a goal to end each month with raw materials on hand, sufficient to meet 25% of the following month's planned production.
The unit expects to sell 20,000 drills in January; 25,000 in February, 25,000 in March, and 30,000 per month thereafter. The selling price is $100 per drill. Half of the drills will be sold for cash through a website. The others will be sold to retailers on account, who pay 40% in the month of purchase, and 60% in the following month. Uncollectible accounts are not material. Each drill requires 20 minutes of direct labor to assemble. Labor rates are $24 per hour. Variable factory overhead is applied at $9 per direct labor hour. The fixed factory overhead is $25,000 per month; 60% of this amount is related to depreciation of plant and equipment. With the exception of depreciation, all overhead is funded as incurred.
Selling, general, and administrative costs are funded in cash as incurred, and consist of fixed components (salaries, $100,000; office, $40,000; and advertising, $75,000) and variable components (15% of sales). Prepare a monthly comprehensive budget plan for Storm's new business unit for January through March. The plan should include the (a) sales and cash collections budget, (b) production budget, (c) direct materials purchases and payments budget, (d) direct labor budget, (e) factory overhead budget, (f) ending finished goods budget (assume total factory overhead is applied to production at the rate of $11.73 per direct labor hour), (g) SG&A budget, and (h) cash budget.
STORM TOOLS
Sales Budget
For the Three Months January to March
January February March
Expected Cash Collections From Sales
STORM TOOLS
Production Budget
For the Three Months January to March
January February March
STORM TOOLS
Direct Materials Budget
For the Three Months January to March
January February March
Expected Cash Payments for Materials Purchases
STORM TOOLS
Direct Labor Budget
For the Three Months January to March
January February March
STORM TOOLS
Factory Overhead Budget
For the Three Months January to March
January February March
STORM TOOLS
Ending Finished Goods Inventory
31-Mar
Units Per Unit Cost Per Unit Total
STORM TOOLS
Selling, General, and Administrative Budget
For the Three Months January to March
January February March
STORM TOOLS
Cash Budget
For the Three Months January to March
January February March
Beginning cash balance
Plus: Customer receipts
Available cash
Less disbursements:
Direct materials
Direct labor
Factory overhead
SG&A
Total disbursements
Cash surplus/(deficit)
Financing:
Planned repayment
Interest on note (1/2% of unpaid balance)
Ending cash balance
Answer:
Storm Tools
STORM TOOLS
1. Sales Budget
For the Three Months January to March
January February March
Expected Cash Collections
From Sales $1,400,000 $2,275,000 $2,500,000
STORM TOOLS
2. Production Budget
For the Three Months January to March
January February March
Production Schedule 25,000 27,500 30,000
Cost of direct materials $1,000,000 $1,100,000 $1,200,000
STORM TOOLS
4. Direct Materials Budget
For the Three Months January to March
January February March
Expected Cash Payments
for Materials Purchases $1,025,000 $1,125,000
STORM TOOLS
5. Direct Labor Budget
For the Three Months January to March
January February March
Direct labor costs $200,000 $220,000 $240,000
STORM TOOLS
6. Factory Overhead Budget
For the Three Months January to March
January February March
Variable overhead $75,000 $82,500 $90,000 $97,500
Fixed overhead 25,000 25,000 25,000 25,000
Total overhead $100,000 $107,500 $115,000 $122,500
Depreciation cost 15,000 15,000 15,000 15,000
Cash payment for o/h $85,000 $92,500 $100,000 $107,500
STORM TOOLS
7. Ending Finished Goods Inventory
31-Mar
Units Per Unit Cost Per Unit Total
January 5,000 $51.91 $259,550
February 7,500 $51.91 $389,325
March 12,500 $51.91 $648,875
STORM TOOLS
Selling, General, and Administrative Budget
For the Three Months January to March
January February March
Fixed overhead:
Salaries $100,000 $100,000 $100,000
Office expenses 40,000 40,000 40,000
Advertising 75,000 75,000 75,000
Fixed overhead $215,000 $215,000 $215,00
Variable overhead 210,000 341,250 375,000
Selling, General, and Admin. $425,000 $556,250 $590,000
STORM TOOLS
Cash Budget
For the Three Months January to March
January February March
Beginning cash balance $500,000 $1,135,000 $1,461,500
Plus: Customer receipts 1,400,000 2,275,000 2,500,000
Available cash $1,900,000 $3,410,000 $3,961,500
Less disbursements:
Direct materials $0 $1,025,000 $1,125,000
Direct labor 200,000 220,000 240,000
Factory overhead 85,000 92,500 100,000
SG&A 425,000 556,250 590,000
Total disbursements $710,000 $1,893,750 $2,055,000
Cash surplus/(deficit) $1,190,000 $1,516,250 $1,906,500
Financing:
Planned repayment $50,000 $50,000 $50,000
Interest on note
(1/2% of unpaid balance) 5,000 4,750 4,500
Ending cash balance $1,135,000 $1,461,500 $1,852,000
Explanation:
a) Data and Calculations:
Initial Balance Sheet on January 1:
Cash $500,000
Plant and equipment $2,500,000
Total assets $3,000,000
Notes payable $1,000,000
Residual equity $2,000,000
Total liabilities and equity $3,000,000
Repayment of note:
Note payment $50,000 per month
Accrued interest 250
Total repayment $50,250 per month
January February March April
Production Schedule 25,000 27,500 30,000 32,500
Cost of direct materials $1,000,000 $1,100,000 $1,200,000 $1,300,000
Ending raw materials 6,875 7,500 8,125
Production Schedule 25,000 27,500 30,000 32,500
Beginning raw materials 6,250 6,875 7,500 8,125
Purchase of materials 25,625 28,125 30,625
Cost price = $40 per drill
Payment for materials $1,025,000 $1,125,000 $1,225,000
Beginning Finished goods 5,000 7,500 12,500
Production 25,000 27,500 30,000 32,500
Ending Finished goods 5,000 7,500 12,500 15,000
Sales 20,000 25,000 25,000 30,000
Selling price = $100 per drill
Credit sales: $1,000,000 $1,250,000 $1,250,000 $1,500,000
40% month of sale 400,000 625,000 625,000 750,000
60% following month 400,000 625,000 625,000
Cash sales 1,000,000 1,250,000 1,250,000 1,500,000
Total sales collection $1,400,000 $2,275,000 $2,500,000 $2,875,000
Direct labor per drill = 20 minutes
Labor rates = $24 per hour
Variable overhead = $9 per direct labor hour
Production Schedule 25,000 27,500 30,000 32,500
Total labor hours 8,333 9,167 10,000 10,833
Direct labor costs $200,000 $220,000 $240,000 $260,000
Variable overhead $75,000 $82,500 $90,000 $97,500
Fixed overhead 25,000 25,000 25,000 25,000
Total overhead $100,000 $107,500 $115,000 $122,500
Depreciation cost 15,000 15,000 15,000 15,000
Cash payment for o/h $85,000 $92,500 $100,000 $107,500
Selling, general, and administrative costs:
Fixed overhead $215,000 $215,000 $215,000 $215,000
Variable overhead 210,000 341,250 375,000 431,250
Total selling, etc $425,000 $556,250 $590,000 $628,250
Cost of production:
Cost of direct materials $1,000,000 $1,100,000 $1,200,000 $1,300,000
Direct labor costs $200,000 $220,000 $240,000 $260,000
Overhead applied 97,746 107,529 117,300 127,071
Total costs of prodn. $1,297,746 $1,427,529 $1,557,300 $1,687,071
Production Schedule 25,000 27,500 30,000 32,500
Cost per unit $51.91 $51.91 $51.91 $51.91
Junko's car dealership has been suffering from dust on the cars in its lot ever since Mak opened his bakery nearby. The bakery's flour deliveries send waves of dust down the block. Junko offers to cover half of the cost of Mak adding a shelter for his delivery area to reduce the blowing of flour dust toward the dealership. This is an example of reducing a negative externality through:
Answer:
"Private bargaining" seems to the appropriate response.
Explanation:
An accidental result of such an operation obtained by a corporate system as well as the agent isn't a respondent to this product or group of products, is termed as Externality.Factory pollution would be a detrimental externality as well as the costs are paid by local people. Correspondingly, thick planting supplies the locality with natural ventilation, which is a good externality.The groups remain private or third-party support until they reached a compromise. Thus the solution seems to be the right one.