In the last example, we determined that Delta has a DTA of $35,000 related to the $100,000 NOL in 2015. In 2016, it decides to apply (use up) the DTA (carryforward). The company has book income of $200,000. No book/tax differences. So, Delta reports taxable income of $200,000 before considering the effect of its NOL. How much is I.T. payable for 2016

Answers

Answer 1

Answer:

The I.T. payable for 2016 is $35,000

Explanation:

Use the following formula to calculate the IT payable for 2016

IT payable = Tax on Income - DTA balance

Where

Tax on Income = Income x Tax rate = $200,000 x 35% = $70,000

DTA balance = $35,000

Placing values in the formula

IT payable = $70,000 - $35,000

IT payable = $35,000


Related Questions

PLEASE HELP ASAP!! THESE ARE TRUE OR FALSE!! WILL MARK BRAINLIEST!!
1. International trade has little effect on our daily lives as consumers and workers.
2. Making, buying, and selling goods and services within a country is known as international
business.
3. Another term for international business is foreign or world trade.
4. Among the advantages enjoyed by the U.S. in world trade is our own production of wool
and oil.
5. Things we buy from other countries are called exports.
6. It is necessary for the U.S. to import a variety of metals.
7. Goods and services we sell to other countries are called exports.
8. There are a number of challenges involved with international trade, but currency exchange
rates are not one of them.
9. A limit set on the quantity of a product that can be imported or exported is called an
embargo.
10. A balance of payments and a balance of trade are the same thing.

Answers

Answer:

1. false

2. true

3. true

4. false

5. true

6. true

Explanation:

because i took this test

Answer:

1. false

2. false

3. true

4. true

5. false

6. true

7. true

8. false

9. false

10. false

Explanation:

Analyse the benefits of employee training to a business.​

Answers

Explanation:

Boosts Employee Performance. ...

Improve Morale and Job Satisfaction. ...

Ensures Opportunities for Learning. ...

Opportunity to Identify Weaknesses. ...

Provide a Framework to Develop Strengths. ...

Encourages Innovation and Risk Acceptance. ...

Boosts Adherence to Quality Standards

Which of the following statement is not true about the Commercial News USA magazine, the official export magazine for the US: Group of answer choices Magazine is published in both English and Spanish Magazine is published in both English and Chinese Magazine is published the official export promotion magazine of the US government Magazine has an estimated 250,000 readers in 178 countries.

Answers

Answer:

Magazine is published in both English and Chinese

Explanation:

According to Capela Chapter 12,  we good to know that the Commercial News USA would be classified as the promotion magazine that should be used for official export with respect to the US Department of Commerce. The magazine would be published in English and Spanish languages and also has approx 2,50,000 readers in 178 countries.

Therefore the first option is not true  

The answer should be C. Bc clip art can have text illustrations etc!

Answers

It’s C ..................,..

Mr. Manning is looking to invest in a one-year stock option and has four possible options. The four options have various rates of return based on whether or not the market rises or fall within the coming year. After consulting with his financial planner, he has the following estimates based on the various market outcomes:

Stock Market Rising Market Stable Market Falling
SUA $68,082 $47,373 $36,362
YSP $64,850 $49,320 $44,865
HTC $57,198 $52,949 $50,605
YHA $59,766 $59,766 $59,766

Mr. Manning’s planner has estimated that the probability the market rises is 60%, stays stable is 30%, and falls is 10%. To assist Mr. Manning in his decision, build a decision tree to model the decision and answer the following question. You do not need to upload your decision tree for this question.

Required:
a. Which stock is the best expected value decision and what is the expected value of that decision?
b. Which stock is the worst expected value decision?

Answers

Answer:

Mr. Manning

a. YHA is the best expected value decision with an expected value of $59,766.

b. HTC is the worst expected value decision.

Explanation:

a) Data and Calculations:

Stock    Market Rising    Market Stable    Market Falling

SUA          $68,082              $47,373              $36,362

YSP           $64,850             $49,320              $44,865

HTC           $57,198             $52,949              $50,605

YHA          $59,766             $59,766              $59,766

Expected Value:

Stock     Market Rising    Market Stable    Market Falling   Expected Value

Probability    60%                   30%                   10%

SUA          $68,082*60%   $47,373*30%    $36,362*10%     =  $58,697

YSP          $64,850*60%   $49,320*30%    $44,865*10%     =     58,163

HTC          $57,198*60%   $52,949*30%    $50,605*10%     =   55,264

YHA         $59,766*60%   $59,766*30%    $59,766*10%     =   59,766

SUA = $40,849.20 + $14,211.90 + $3,636.20 = $58,697.30

YSP = $38,880 + $14,796 + $4,486.50 = $58,162.50

HTC = $34,318.80 + $15,884.70 + $5,060.50 = $55,264

YHA = $35,859.60 + $17,929.80 + $5,976.60 = $59,766

Preparing job order costing journal entries

Journalize the following transactions for Marge's Sofas.

a. Incurred and paid Web site expenses, $2,000.
b. Incurred manufacturing wages of $15,000, 75% of which was direct labor and 25% of which was indirect labor.
c. Purchased raw materials on account, $24,000.
d. Used in production: direct materials, $7,500; indirect materials, $5,000.
e. Recorded manufacturing overhead: depreciation on plant, $18,000; plant insurance (previously paid), $1,500; plant property tax, $3,900 (credit Property Tax Payable).
f. Allocated manufacturing overhead to jobs, 200% of direct labor costs.
g. Completed production on jobs with costs of $40,000.
h. Sold inventory on account, $22,000; cost of goods sold, $18,000.
i. Adjusted for overallocated or underallocated overhead.

Answers

Answer:

Item a

Debit : Website expenses $2,000

Credit : Cash $2,000

Item b

Debit : Work in Process : Direct labor $11,250

Debit : Work in Process : Indirect labor $3,750

Credit : Wages Payable  $15,000

Item c

Debit : Raw Materials $24,000

Credit : Accounts Payable $24,000

Item d

Debit : Work in Process : Direct Materials  $7,500

Debit : Work in Process : Indirect Materials $5,000

Credit : Raw Materials $12,500

Item e

Debit : Work in Process : Depreciation $18,000

Credit : Accumulated depreciation $18,000

Item e

Debit : Work in Process : Pant Insurance  $1,500

Credit : Prepaid insurance  $1,500

Item e

Debit : Work in Process : Property tax  $3,900

Credit : Property Tax Payable  $3,900

Item f

Debit : Overheads $11,250 x 200% $22,500

Credit : Work in Process $22,500

Item g

Debit : Finished Goods Inventory $40,000

Credit : Work in Process $40,000

Item h

Debit : Accounts Receivables   $22,000

Debit : Cost of Sales  $18,000

Credit : Sales Revenue  $22,000

Credit : Finished Goods Inventory $18,000

Explanation:

The journals for the transactions have been prepared above.

Carrie is creating a personal balance sheet. The heading includes the period of time that the balance sheet represents Which could be the heading of Carrie's balance sheet?
Carrie's Balance Sheet (January 1, 2021)
Carrie's Balance Sheet (January)
Carrie's Balance Sheet (Friday, January 3) Carrie's Balance Sheet (January 2011 - January 2021)​

Answers

Answer: Carrie's Balance Sheet (January 1, 2021)

Explanation:

The heading of the balance sheet should include as much as possible, the month and year of the balance sheet. It can also include the exact date.

This is done so that the Balance sheet can have a particular reference date such that stakeholders who use the balance sheet can know relate the financial performance of the company as of a certain day which would enable for better analysis.

The heading of Carrie's balance sheet is: Carrie's Balance Sheet (January 2021).

What is balance sheet?

Balance sheet help to summarize a company or an organization financial position or financial statement.

Since she is preparing the balance sheet for herself, what will be the heading of the balance sheet is  Carrie's Balance Sheet (January 2021).

Therefore the heading of Carrie's balance sheet is: Carrie's Balance Sheet (January 2021).

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Kieso Company borrowed $640,000 for six months. The annual interest rate on the loan was 8%. Kieso's fiscal year ends on December 31. Kieso borrowed the $640,000 one month prior to the end of its last fiscal year and paid the $640,000 plus interest back five months into its current fiscal year. How much interest expense, if any, would Kieso report at the end of its last fiscal year and at the end of its current fiscal year

Answers

Answer:

Interest for last fiscal year $4,267

Interest for current fiscal year $21,333

Explanation:

Calculation to determine How much interest expense, if any, would Kieso report at the end of its last fiscal year and at the end of its current fiscal year

Interest for last fiscal year=$640,000*8%*1/12

Interest for last fiscal year=$4,267

Interest for current fiscal year=$640,000*8%*5/12

Interest for current fiscal year=$21,333

Therefore How much interest expense, if any, would Kieso report at the end of its last fiscal year and at the end of its current fiscal year are:

Interest for last fiscal year $4,267

Interest for current fiscal year $21,333

Yozamba Technology has two divisions, Consumer and Commercial, and two corporate service departments, Tech Support and Purchasing. The corporate expenses for the year ended December 31, 20Y7, are as follows:

Tech Support Department $516,000
Purchasing Department 89,600
Other corporate administrative expenses 560,000
Total corporate expense $1,165,600

The other corporate administrative expenses include officers' salaries and other expenses required by the corporation. The Tech Support Department charges the divisions for services rendered, based on the number of computers in the department, and the Purchasing Department charges divisions for services, based on the number of purchase orders for each department. The usage of service by the two divisions is as follows:

Tech Support Purchasing
Consumer Division 375 computers 1,960 purchase prder
Commercial Division 225 3640
Total 600 computers 5,600 purchase order

The service department charges of the Tech Support Department and the Purchasing Department are considered controllable by the divisions. Corporate administrative expenses are not considered controllable by the divisions. The revenues, cost of goods sold, and operating expenses for the two divisions are as follows:

Consumer Commercial
Revenues $7,430,000 $6,184,000
Cost of goods sold 4,123,000 3,125,000
Operating expenses 1,465,000 1,546,000

Required:
Prepare the divisional income statements for the two divisions.

Answers

Answer:

Yozamba Technology

Divisional Income Statements:

                                  Consumer       Commercial        Total

Revenues                 $7,430,000        $6,184,000    $13,614,000

Cost of goods sold     4,123,000          3,125,000       7,248,000

Gross profit              $3,307,000      $3,059,000    $6,366,000

Operating expenses  1,465,000          1,546,000        3,011,000

Corporate expenses:

Tech Support               322,500             193,500          516,000

Purchasing                      31,360               58,240           89,600

Other corporate administrative expenses                  560,000

Total expenses       $1,818,860          $1,797,740     $4,176,600

Net income (loss)    $1,488,140         $1,261,260     $2,189,400

Explanation:

a) Data and Calculations:

Corporate expenses for the year ended December 31, 20Y7:

Tech Support Department                         $516,000  Number of computers

Purchasing Department                                 89,600  Number of POs

Other corporate administrative expenses 560,000

Total corporate expense                         $1,165,600

Usage of Service:

                                 Tech Support          Purchasing

Consumer Division    375 computers     1,960 purchase order

Commercial Division 225                       3,640

Total                           600 computers    5,600 purchase order

Overhead Rates:

Tech Support = $860 per computer ($516,000/600)

Purchase = $16 per purchase order ($89,600/5,600)

Allocation of Corporate Expenses:

                                     Tech Support     Purchasing     Total

Consumer Division           $322,500        $31,360        353,860

                                       (375 * $860)     (1,960 * $16)

Commercial Division            193,500        58,240          251,740

                                      (225 * $860)     (3,640 * $16)

Total                                   $516,000      $89,600      $605,600

Indicate whether each of the following companies are primarily a service, merchandise, or manufacturing business. If you are unfamiliar with the company, use the Internet to locate the company's home page or use the finance Web site of Yahoo.1. Alcoa Inc. 2. Boeing 3. Caterpillar 4. Citigroup Inc. 5. CVS 6. Dow Chemical Company 7. eBay Inc. 8. FedEx 9. Ford Motor Company 10. Gap Inc. 11. H&R Block 12. Hilton Hospitality, Inc. 13. Procter & Gamble 14. SunTrust 15. WalMart Stores, Inc.

Answers

Answer:

Service company.

4. Citigroup Inc.

5. CVS

7. eBay Inc.

8. FedEx

11. H&R Block

12. Hilton Hospitality, Inc.

14. SunTrust

Merchandise Company.

10. Gap Inc.

13. Procter & Gamble

15. WalMart Stores, Inc.

Manufacturing company.

1. Alcoa Inc.

2. Boeing

3. Caterpillar

6. Dow Chemical Company

9. Ford Motor Company  

Assume the following information for Windsor Corp.

Accounts receivable (beginning balance) $139,000
Allowance for doubtful accounts (beginning balance) 11,450
Net credit sales 940,000
Collections 917,000
Write-offs of accounts receivable 5,600
Collections of accounts previously written off 1,600

Uncollectible accounts are expected to be 9% of the ending balance in accounts receivable.

Required:
Prepare the entries to record sales and collections during the period.

Answers

Answer:

To record the Sales

Dr. Account Receivables 940,000

Cr. Sales 940,000

To record the Collection

Dr. Cash 917,000

Cr. Account Receivables 917,000

Explanation:

To record the sales we need to debit the account receivables as the sales are made on credit and credit the sale to record the sale.

To record the Collection from the customers we need to debit the cash account to record the receipt of cash ab credit the account receivables to decrease the value of account receivables by the amount of collection.

Piper Rose Boutique has been approached by the community college to make special polo shirts for the faculty and staff. The college is willing to buy 4,000 polos with its own design for $6.00 each. The company normally sells its shirts for $12.00 each. The company has enough excess capacity to make this order. A breakdown of the costs is as follows:
Direct materials $2.00
Direct labor 0.50
Variable factory overhead 1.50
Fixed factory overhead 2.50
Total cost per unit $6.50
Should Piper Rose Boutique accept the special order made by the college?

Answers

Answer:

Piper Rose Boutique should accept the special order made by the college

Explanation:

Price per unit the college is willing to pay = $6

Total variable cost per unit to be incurred by Piper Rose Boutique = Direct materials + Direct labor + Variable factory overhead = $2.00 + $0.50 + $1.50 = $4,00

Since the price per unit of $6 that the college is willing to pay is greater than the total variable cost per unit of $4 to be incurred by Piper Rose Boutique, Piper Rose Boutique should accept the special order made by the college.

Note: the Fixed factory overhead is not relevant in taking the decision. Only the variable costs are relevant.

Lauer Corporation uses the periodic inventory system and has provided the following information about one of its laptop computers: Date Transaction Number of Units Cost per Unit 1/1 Beginning Inventory 220 $ 920 5/5 Purchase 320 $ 1,020 8/10 Purchase 420 $ 1,120 10/15 Purchase 260 $ 1,170 During the year, Lauer sold 1,050 laptop computers. What was ending inventory using the FIFO cost flow assumption

Answers

Answer:

$198,900

Explanation:

Ending inventory units = Available units for sale - Units sold

Ending inventory units = 220 + 320 + 420 + 260

Ending inventory units = 1,220.

Units sold = 1,050.

Ending inventory units = 1,220 - 1,050

Ending inventory units = 170

As per the FIFO cost flow assumption, sales comprise of units from beginning inventory and earlier purchases. Hence, ending inventory comprises units from latest purchases.

So, ending inventory of 170 units would be valued at the price from 10/15 purchases.

10/15 purchase price per unit = $1,170

Ending inventory value = 170 units x $1,170

Ending inventory value = $198,900

Tex's Manufacturing Company can make 200 units of a necessary component part with the following costs: Direct Materials $240,000 Direct Labor 35,000 Variable Overhead 75,000 Fixed Overhead 40,000 If Tex's Manufacturing Company can purchase the component externally for $330,000 and only $15,000 of the fixed costs can be avoided, what is the correct make-or-buy decision

Answers

Answer:

Buy and save $35,000

Explanation:

The computation is shown below:

Particulars                                  Make                          Buy

Direct Materials                         $240,000

Direct Labor                               $35,000

Variable Overhead                     $75,000

Fixed Overhead                          $15,000

Purchase cost                                                          $330,000

Total cost                                      $365,000           $330,000

As we can see that the buying total cost is less than the total making cost so here we can buy the product as it saves the company by $35,000 ($365,000 - $330,000)

You purchased 1,000 shares of the New Fund at a price of $38 per share at the beginning of the year. You paid a front-end load of 2.5%. The securities in which the fund invests increase in value by 9% during the year. The fund's expense ratio is 1.3%. What is your rate of return on the fund if you sell your shares at the end of the year

Answers

Answer:

1.40%

Explanation:

Calculation to determine your rate of return on the fund if you sell your shares at the end of the year

Rate of Return=[($38,000*(1.13-.09))-((1000 x $38/(1-.025))]/[1000 x $38/(1-.025)]

Rate of Return=[$39,520-($38,000/(1-.025))]/-[$38,000/(1-.025)]

Rate of Return=($39,520-38,974.36)/38,974.36

Rate of Return=1.40%

Therefore your rate of return on the fund if you sell your shares at the end of the year will be 1.40%

You expect General Motors (GM) to have a beta of 1.3 over the next year and the beta of Exxon Mobil (XOM) to be 0.9 over the next year. Also, you expect the volatility of General Motors to be 40% and that of Exxon Mobil to be 30% over the next year. Which stock has more systematic risk? Which stock has more total risk? A) XOM, GM B) XOM, XOM C) GM, XOM D) GM, GM E) Not enough information to answer the question

Answers

Answer:

d

Explanation:

Systemic risk are risk that are inherent in the economy. They cannot be diversified away. They are also known as market risk. examples of this risk include recession, inflation, and high interest rates. Investors should seek compensation for systemic risk. Systemic risk is measured by beta. The higher beta is, the higher the systemic risk and the higher the compensation demanded for by investors

GM has a higher beta and thus it has a higher systemic risk

total risk is measured by volatility. The higher the volatility, the higher the total risk . GM has a higher volatility

Brodrick Company expects to produce 20,000 units for the year ending December 31. A flexible budget for 20,000 units of production reflects sales of $400,000; variable costs of $80,000; and fixed costs of $150,000. Assume that actual sales for the year are $480,000 (26,000 units), actual variable costs for the year are $112,000, and actual fixed costs for the year are $145,000. Prepare a flexible budget performance report for the year. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.)

Answers

Answer: Check attachment

Explanation:

The flexible budget performance report for the year has been solved and attached.

Note that the selling price per unit was calculated as:

= 400,000 /20,000

= $20 per unit

Therefore, total sales was gotten as:

= 26000 × $20

= $520,000

Variable cost per unit was calculated as:

= 80,000/20,000

= $4 per unit

Then, total cost was:

= $4 × 26,000

= $104,000

Check attachment for further details.

Use the following information to answer Questions 12 - 15. Below is selected data for Gertup Corporation as of 12/31/05: Gertup has maintained the same inventory levels throughout 2005. If end of year inventory turnover was increased to 12 through more efficient relationships with suppliers, how much cash would be freed up (pick closest number)

Answers

Answer:

the cash that should be freed up is $267

Explanation:

The computation of the cash that would be freed up is shown below:

As we know that

The inventory turnover is

= Cost of goods sold ÷ average inventory

12 = $14,800  ÷ average inventory

So, the average inventory is 1,233

Now the cash that should be freed up is  

= 1,500 - 1,233

= $267

hence, the cash that should be freed up is $267

Problem 10-18 Return on Investment (ROI) and Residual Income [LO10-1, LO10-2] "I know headquarters wants us to add that new product line," said Dell Havasi, manager of Billings Company’s Office Products Division. "But I want to see the numbers before I make any move. Our division’s return on investment (ROI) has led the company for three years, and I don’t want any letdown." Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on the basis of ROI, with year-end bonuses given to the divisional managers who have the highest ROIs. Operating results for the company’s Office Products Division for this year are given below: Sales $ 10,000,000 Variable expenses 6,000,000 Contribution margin 4,000,000 Fixed expenses 3,200,000 Net operating income $ 800,000 Divisional average operating assets $ 4,000,000 The company had an overall return on investment (ROI) of 15% this year (considering all divisions). Next year the Office Products Division has an opportunity to add a new product line that would require an additional investment that would increase average operating assets by $1,000,000. The cost and revenue characteristics of the new product line per year would be: Sales $2,000,000 Variable expenses 60% of sales Fixed expenses $640,000

Answers

Solution :

Income on new line

Contribution (2,000,00 x40%)           800,000

Less fixed expense                          - 640,000

Net operating income                        160,000

Particulars                              Present            New line          Total

Sales                                 10,000,000      2,000,000    12,000,000      

Net operating income      800,000            160,000        960,000

Operating assets             4,000,000         1,000,000   5,000,000

Margin                                   8%                       8%               8%

ROI                                     20.00%                16.00%         19.20%

Residual income   = net operating income - (average assets x minimum rate or return)

Particulars                                  Present            New line          Total

Operating assets                   4,000,000         1,000,000   5,000,000      

Minimum required return          12 %                   12 %             12 %

Min net operating income     480,000             120,000      600,000

Actual net operating income  800,000            160,000      960,000

Residual income                      320,000               40,000      360,000      

 

Return on investment is the profitability or the performance measurement tool that determines the percentage of returns being gained from total investments. It determines the efficiency of the investment and its project to generate higher returns from its operations.

The residual income is the net income in the hands of the business after the payment of all operating and nonoperating expenses and other payments.

The total return on investment inclusive of the present and the new line is 19.20%.

The total residual income is $360,000.

The computation of the return on investment is computed in the table attached below.

The formula for determining the residual income is:

[tex]\begin{aligned}\text{Residual Income}&=\text{Net Operating Income}-\left(\text{Average assets}\times\text{Minimum Rate of Return} \right ) \end{aligned}[/tex]

The entire computation of the residual income is attached in the image below.

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https://brainly.com/question/13575981

Recording Cash Dividends [LO 11-3 National Chocolate Corp. produces chocolate bars and snacks under the brand names Blast and Soothe. A press release contained the following information March 5-National Chocolate Corp. today announced that its Board of Directors has declared a special one-time" cash dividend of $1.20 per share on its 102,000 outstanding common shares. The dividend will be paid on April 29 to shareholders of record at the close of business on March 26. The Company's fiscal year will end April 30 Required 1. Prepare any journal entries that National Chocolate Corp. should make on the four dates mentioned in press release. (If no entry is required for a transaction/date, select "No Journal Entry Required" in the first account field.)

Answers

Answer and Explanation:

The journal entries are shown below:

On Mar-05

DIvidends $122,400 (102,000 shares × $1.20)

       To Cash dividends payable  $122,400

(Being declaration of the dividend is recorded)

On Mar-26

No entry should be recorded on the recording date      

On Apr-29

Cash dividends payable $122,400  

      To Cash $122,400

(being payment of the cash dividend is recorded)  

On Apr-30

Retained earnings $122,400    

     To Dividends $122,400

(Being closing of the dividend account is recorded)

The accountant at Blackjack Company is figuring out the difference in income taxes the company will pay depending on the choice of either FIFO or LIFO as an inventory costing method. The tax rate is 30% and the FIFO method will result in income before taxes of $3,640. The LIFO method will result in income before taxes of $3,290. What is the difference in tax that would be paid between the two methods

Answers

Answer: $105

Explanation:

Taxes under LIFO:

= LIFO income * Tax rate

= 3,290 * 30%

= $987

Taxes under FIFO:

= FIFO income * Tax rate

= 3,640 * 30%

= $1,092

Difference:

= FIFO tax - LIFO tax

= $105

Last summer, Maria decided to join a bowling league with some colleagues from work. They formed a team and bowled together several times to get to know one another better. The week before the league started, the team had to come up with a name. During a meeting to discuss this, Maria and her teammate Tim got into a heated debate because Maria wanted their name to be The Lucky Strikes, whereas Tim wanted the team name to be The Pin City Pimps. While yelling at each other, it became clear that Maria thought she should be the team manager because she had formed the team. Tim was just as adamant that he should be team manager because he is the more experienced bowler.

1. As Sunita and Hubert argue about the team name, what stage of development is their bowling team in?

a. Storming
b. Norming
c. Performing
d. Forming

2. If a team leader wanted to help a team such as Sunita’s get through the storming stage of team development, he or she should take which of the following actions? Check all that apply.

a. Encourage participation by all team members.
b. Help the team discourage free riding.
c. Disband the team.
d. Watch for blocking, or disruptive, behaviors and help prevent them.

Answers

#1 is storming
#2 is a. And d.

Help soon! Its Sunday and i have too much over due homework ;-;

Answers

Answer:

the first one at the left goes with the third one on the left.

the second on the left goes with the second one .

the third one goes with the first one

and the last one goes with the last one

On February 1, 2020, Nash's Contractors agreed to construct a building at a contract price of $5,700,000. Nash's estimated total construction costs would be $3,920,000 and the project would be finished in 2022. Information relating to the costs and billings for this contract is as follows:

2020 2021 2022
Total costs incurred to date $1,470,000 $2,580,000 $4,550,000
Estimated costs to complete 2,450,000 1,720,000 -0-
Customer billings to date 2,100,000 3,920,000 5,500,000
Collections to date 1,900,000 3,400,000 5,400,000

Fill in the correct amounts on the following schedule. For percentage-of-completion accounting and for completed-contract accounting, show the gross profit that should be recorded for 2020, 2021, and 2022.

2020 $________ 2020 $________
2021 $________ 2021 $________
2022 $________ 2022 $________

Answers

Answer:

Nash's Contractor

Gross profit that should be recorded for 2020, 2021, and 2022:

Percentage -of completion                     Completed-contract

2020 $___667,500_____                      2020 $___0_____

2021 $____361,395____                       2021 $____0____

2022 $____121,105____                       2022 $____1,150,000____

Explanation:

a) Data and Calculations:

Contract price = $5,700,000

Estimated construction costs = $3,920,000

Project completion date = 2022

Costs and Billings:

                                                     2020            2021            2022

Total costs incurred to date  $1,470,000 $2,580,000 $4,550,000

Estimated costs to complete 2,450,000     1,720,000     -0-

Customer billings to date       2,100,000    3,920,000  5,500,000

Collections to date                 1,900,000     3,400,000  5,400,000

Percentage of completion:

2020:

Revenue  =        $2,137,500 ($1,470,000/$3,920,000 * $5,700,000)

Cost incurred =   1,470,000

Gross profit =     $667,500

2021:

Revenue =         $1,471,395 ($1,110,000/$4,300,000 * $5,700,000)

Cost incurred =   1,110,000

Gross profit =     $361,395

2022:

Revenue =      $2,091,105 ($5,700,000 - $2,137,500 - $1,471,395)

Cost incurred   1,970,000

Gross profit =     $121,105

Completed contract

2022: Revenue = $5,700,000

Total costs =          4,550,000

Gross profit  =        $1,150,000

Gamegirl Inc., has the following transactions during August. August 6 Sold 72 handheld game devices for $210 each to DS Unlimited on account, terms 2/10, net 60. The cost of the 72 game devices sold, was $190 each. August 10 DS Unlimited returned seven game devices purchased on 6th August since they were defective. August 14 Received full amount due from DS Unlimited.

Required:
Prepare the transactions for GameGirl, Inc., assuming the company uses a perpetual inventory system.

Answers

Answer:

Aug 6

Dr Accounts Receivable $15,120

Cr Sales $15,120

Dr Cost of Goods Sold $13,680

Cr Inventory $13,680

Aug 10

Dr Sales Return $1,470

Cr Accounts Receivable $1,470

Aug 14

Dr Cash $13,513

Dr Sales Discount $137

Cr Accounts Receivable $13,650

Explanation:

Preparation of the transactions for GameGirl, Inc., assuming the company uses a perpetual inventory system.

Aug 6 Accounts Receivable $15,120

Sales $15,120

(72*$210)

Dr Cost of Goods Sold $13,680

Cr Inventory $13,680

(72*$190)

Aug 10

Dr Sales Return $1,470

Cr Accounts Receivable $1,470

(7*$210)

Aug 14

Dr Cash $13,513

($13,650-$137)

Dr Sales Discount $137

Cr Accounts Receivable $13,650

Computation of Sales Discount:

Sales $15,120

Less: Sales Return $1,470

Total Sales $13,650

Multiply: Percentage of Discount 1%

Sales Discount $137

Suppose you want to deposit a certain amount of money into a savings account and then leave it alone to draw interest for the next 10 years. At the end of 10 years you would like to have $10,000 in the account. How much do you need to deposit today to make that happen?

Answers

Answer:

PV= FV / (1 + i)^n

Explanation:

Giving the following information:

Number of periods (n)= 10 years

Future value (FV)= $10,000

We were not provided with the interest rate. I will assume an interest rate of 7% compounded annually.

To calculate the initial investment, we need to use the following formula:

PV= FV / (1 + i)^n

PV= 10,000 / (1.07^10)

PV= $5,083.49

Initial investment= $5,083.49

Carol and Dave each purchase 100 shares of stock of Burgundy, Inc., a publicly owned corporation, in July for $10,000 each. Carol sells her stock on December 31 for $8,000. Because Burgundy’s stock is listed on a national exchange, Dave can ascertain that his shares are worth $8,000 on December 31. Does the Federal income tax law treat the decline in value of the stock differently for Carol and Dave? Explain.

Answers

Answer:

See below

Explanation:

From the above information, we can deduce that the stock owned by Carol and Dave falls in value by $2,000 I.e ($10,000 - $8,000) ; it is to be noted that Carol solely has realised and recognized loss of $2,000.

Here, one of the cogent factors that determines whether a sale has taken place is if realization has been effected. Here, stock sold by Carol qualifies as a disposition while the decline in the value of stock sold by Dave does not qualify as disposition.

With regards to the foregoing, we can conclude that the federal income tax law treat the decline in the value of the stock differently for Carol and Dave.

At the present time, Andalusian Limited (AL) has 5-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have a current market price of $1,438.04 per bond, carry a coupon rate of 14%, and distribute annual coupon payments. The company incurs a federal-plus-state tax rate of 35%. If AL wants to issue new debt, what would be a reasonable estimate for its after-tax cost of debt (rounded to two decimal places)? (Note: Round your YTM rate to two decimal place.)

Answers

Answer:

2.69%

Explanation:

According to the scenario, computation of the given data are as follows,

Face value (FV) = $1,000

Time period = 5 years

Present Value (PV) = $1,438.04

Coupon rate = 14%

Payment (pmt) = 14% × $1,000 = $140

So, by using excel function find YTM, we get

YTM = 4.13%

So, After Tax cost = Rate ( 1 - tax rate)

= 4.13% ( 1 - 35%)

= 4.13% × 65%

= 2.685% or 2.69%

Excel function is attached below.

On April 1, Java Brewers created a petty cash fund starting with $100. On April 30, there was only $5 remaining in the petty cash box. The custodian of the fund presented vouchers to the company accountant for Supplies of $55 and Delivery Expenses of $40. The journal entry on April 30, to replenish the fund, would be: On April 1, Java Brewers created a petty cash fund starting with $100. On April 30, there was only $5 remaining in the petty cash box. The custodian of the fund presented vouchers to the company accountant for Supplies of $55 and Delivery Expenses of $40. The journal entry on April 30, to replenish the fund, would be: OPTION ACCOUNT TITLE DEBIT CREDIT (A) Petty cash 95 Cash 95 (B) Cash 95 Petty cash 95 (C) Delivery expenses 40 Supplies 55 Petty cash 95 (D) Delivery expenses 40 Supplies 55 Cash 95

Answers

Answer:

D. Dr Delivery expenses 40, Supplies 55

Cr Cash 95

Explanation:

Given the above information, the journal entry on April 30, to replenish the fund would be;

Debit the expenses account. The expenses here are delivery and supply expenses, while Cash would be credited(Sum of the delivery and supply expenses)

Therefore,

Dr Delivery expenses $40

Dr Supplies $55

_____________ To Cash $95

The D. Dorner Farms Corporation is considering purchasing one of two fertilizer-herbicides for the upcoming year. The more expensive of the two is better and will produce a higher yield. Assume these projects are mutually exclusive and that the required rate of return is 10 percent. Given the following free cash flows:

Product A Product B
Initial outlay -$5000 -$5000
Inflow year 1 700 6,000

Required:
a. Calculate the NPV of each project.
b. Calculate the PI of each project.
c. Calculate the IRR of each project.
d. If there is no capital-rationing constraint, which project should be selected? If there is a capital-rationing constraint, how should the decision be made?

Answers

Question Correction:

The question stated that there is a more expensive fertilizer-herbicide.  Therefore, their initial outlays cannot be equal as stated.  Instead, the correct cash flows, including initial outlays are:

                   Product A  Product B

Initial outlay    -$500      -$5000

Inflow year 1       700        6,000

Answer:

The D. Dorner Farms Corporation

                        Product A  Product B

a. NPV =               $136          $454

b. PI =                  1.272           1.091

c. IRR =               27.2%        9.08%

d. If there is no capital-rationing constraint, Project B should be chosen despite its poor PI and IRR performances, but for returning a larger NPV.

e. If there is a capital-rationing constraint, Project A should be chosen because of its more impressive PI and IRR performances.

Explanation:

a) Data and Calculations:

Required rate of return for the projects = 10%

Present factor of 10% for 1 year = 0.909

Free cash flows:

                   Product A  Product B

Initial outlay    -$500      -$5000

Inflow year 1       700        6,000

Present values:

                   Product A  Product B

Initial outlay    -$500      -$5000

Inflow year 1      636         5,454

NPV =               $136          $454

b) PI (Profitability Index) is a useful tool in capital budgeting which measures the profit potential of a project in order to ease decisions.  It is computed by dividing the present value of cash inflows by the initial investment cost.  Another formula is: 1 + (NPV/Initial outlay).

Therefore, the PI for each project is calculated as follows:

PI =            1+ (NPV/Initial outlay)

                   Product A             Product B

PI =      1 + ($136/$500)         1 + ($454/$5,000)

=                1.272                     1.091

IRR (Internal Rate of Return) = NPV/Initial Outlay

                   Product A                     Product B

IRR =          $136/$500 * 100           $454/$5,000 * 100

=                 27.2%                             9.08%

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