Answer:
B. The former program trustee argues that the current inflation measure overcompensates seniors since it ignores the substitution effect.C. According to advocates for seniors, the 2020 COLA is not enough to compensate for rising healthcare costs. D. Elizabeth Warren has proposed using a new inflation measure that outpaces the current one used.Explanation:
The article is, ''Social Security checks to rise modestly amid push to expand benefits '' by Associated Press.
Blahous is a former program trustee who believes that the current inflation adjustment rate at which Social security is increasing is overcompensating seniors because it does not take into account that seniors could be switching to buying cheaper products which is the Substitution effect.
Advocates and the seniors themselves have complained that the 2020 COLA is not enough to meet their current needs especially given the rising cost of healthcare.
Elizabeth Warren and Bernie Sanders both proposed using a new measure for inflation that will adequately compensate the seniors because it outpaces the current one used.
You are evaluating two different silicon wafer milling machines. The Techron I costs $234,000, has a three-year life, and has pretax operating costs of $61,000 per year. The Techron II costs $410,000, has a five-year life, and has pretax operating costs of $34,000 per year. For both milling machines, use straight-line depreciation to zero over the projectâs life and assume a salvage value of $38,000. If your tax rate is 35 percent and your discount rate is 10 percent.
Required:
Compute the EAC for both machines.
T-1:
Table-1 vide annex
Applying EAC formula
c = \frac{r(NPV)}{(1-(1+r)^{-n} )}
[tex]c = \frac{r(NPV)}{(1-(1+r)^{-n} )}[/tex]
c: equivalent annuity cash flow
NPV: Net present value
r: rate per period
n: number of periods
we have
[tex]c = \frac{0.1*(-246155.15)}{(1-(1+0.1)^{-3} )}[/tex]
c = $ - 98 982,63
T-2
Table-2 vide annex
Applying EAC formula
c = \frac{r(NPV)}{(1-(1+r)^{-n} )}
[tex]c = \frac{r(NPV)}{(1-(1+r)^{-n} )}[/tex]
c: equivalent annuity cash flow
NPV: Net present value
r: rate per period
n: number of periods
we have
[tex]c = \frac{0.1*(-369644.05)}{(1-(1+0.01)^{-5} )}[/tex]
c = - $ 97 511.17
This activity is important because as world trade has grown, more companies have entered the global market. Once a firm decides to enter the global market, it must choose which means of market entry is the most appropriate. The global market entry strategies vary greatly on the dimensions of financial commitment, risk, marketing control, and profit potential. The goal of this exercise is to demonstrate your understanding of the different types of global market entry strategies: exporting, licensing, joint venture, and direct investment.
Match the correct global market entry strategy with the followings.
a. Indirect Exporting
b. Direct Exporting
c. Licensing
d. Franchising
e. Joint Venture
f. Direct Investment
1. Moodmatcher lipstick
2. Boeing
3. Yoplait
4. McDonald's
Answer:
Matching the correct global market entry strategy with:
1. Moodmatcher lipstick = b. Direct Exporting
2. Boeing = b. Direct Exporting
3. Yoplait = d. Franchising
4. McDonald's = d. Franchising
Explanation:
a) Global market entry strategies;
a. Indirect Exporting
b. Direct Exporting
c. Licensing
d. Franchising
e. Joint Venture
f. Direct Investment
Most of the globalized entities enter the global market space through direct exports to consumer countries. Some others engage in licensing and franchising, joint venture and indirect exports of their products and services to non-domestic countries. Huge revenues are earned through global trades. Some companies like MTN headquartered in South Africa earn more revenue in foreign markets than in their domestic markets.
Recall Little’s Law that relates the 3 most important process measures (average inventory, average flow rate, and average flow time). The following statement gives two of these three measures and you must find the third. "The flow unit is accounts receivable dollars. A manufacturer bills $300 million worth of cellular equipment per year. The average amount in accounts receivable is $45 million. How much time does the accounts receivable process take, on average, in years? (i.e., the time that elapses on average from the time customer is billed to the time payment is received)?" Enter the number in years, rounded to 2 decimal points. (For example, report 16.347 years as 16.35.)
Answer: 0.15 years
Explanation:
According to Little's Law, it should be noted that:
I = R × T
where,
I = amount of flow units
R = rate of processing flow units
T = time
For this question,
I = $45 million
R = $300 million
Time will be:
T = I/R
T = 45/300
T = 0.15 years
Therefore, the account receivable process will use an average of 0.15 years.
Transaction Entries and Adjusting Entries Deluxe Building Services offers janitorial services on both a contract basis and an hourly basis. On January 1, Deluxe collected $42,000 in advance on a six-month contract for work to be performed evenly during the next six months. a. Provide the general journal entry on January 1 to record the receipt of $42,000 for contract work. b. Provide the adjusting entry to be made on January 31, for the contract work done during January. c. At January 31, a total of 40 hours of hourly rate janitor work was unbilled. The billing rate is $25 per hour. Provide the adjusting entry needed on January 31. (Note: The firm uses the account Fees Receivable to reflect amounts due but not yet billed.)
Answer:
Jan.1
Dr Cash $ 42,000
Cr Unearned Service Revenue $42,000
Jan.31
Dr Unearned Service Revenue $ 7,000
Cr Service Revenue $ 7,000
Jan.31
Dr Account Fees Receivable $1,000
Cr Service Revenue $1,000
Explanation:
Preparation of Journal Entries
Jan.1
Dr Cash $ 42,000
Cr Unearned Service Revenue $42,000
(To record 6 month contract)
Jan.31
Dr Unearned Service Revenue $ 7,000 (42,000*1/6)
Cr Service Revenue $ 7,000
(To record january service fees earned on contract)
Jan.31
Dr Account Fees Receivable $1,000 ($40hours*$25 per hour)
Cr Service Revenue $1,000
(To record unbilled service fees at January 31)
rion Iron Corp. tracks the number of units purchased and sold throughout each year but applies its inventory costing method at the end of the year, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31. Transactions Units Unit Cost a. Inventory, Beginning 300 $ 14 For the year: b. Purchase, April 11 950 12 c. Purchase, June 1 850 15 d. Sale, May 1 (sold for $42 per unit) 300 e. Sale, July 3 (sold for $42 per unit) 630 f. Operating expenses (excluding income tax expense), $18,200 Required: 1. Calculate the number and cost of goods available for sale. 2. Calculate the number of units in ending inventory. 3. Compute the cost of ending inventory and cost of goods sold under (a) FIFO, (b) LIFO, and (c) weighted average cost. 4. Prepare an income statement that shows under the FIFO method, LIFO method and weighted average method. 6. Which inventory costing method minimizes income taxes
Answer:
1. 2,100 units and $28,350
2. 1,170 units
3.
Cost of ending inventory Cost of goods sold
a. FIFO $16,590 $11,760
b. LIFO $15,300 $13,050
c. Weighted Average $12,093 $12,492
4.
Income Statement for the year ended December 31
FIFO LIFO Weighted Average
Sales ($12,600 + $ 26,460) $39,060 $39,060 $39,060
Cost of Goods Sold ($11,760) ($13,050) ( $12,492)
Gross Profit $27,300 $26,010 $26,568
Less Expenses ($18,200) ($18,200) ($18,200)
Net Income / (Loss) $9,100 $7,810 $8,368
5. No Data
6. LIFO
Explanation:
Periodic Method means that inventory valuation is done after a specific period. In this case valuation is being done at year end.
Calculation of the number and cost of goods available for sale
Units Total Costs
Beginning Inventory 300 $4,200
Add Purchases :
April 11 950 $11,400
June 1 850 $12,750
Available for Sale 2,100 $28,350
Ending Inventory units = Units Available for Sale - Units Sold
= 2,100 units - 300 units - 630 units
= 1,170 units
a. FIFO
FIFO stands for First In First Out.
i. Cost of ending inventory
320 units × $12 = $3,840
850 units × $15 = $12,750
Total = $16,590
ii. Cost of goods sold
300 units × $14 = $4,200
630 units × $12 = $7,560
Total = $11,760
b. LIFO
LIFO stands for Last In Last Out
i. Cost of ending inventory
300 units × $14 = $4,200
650 units × $12 = $7,800
220 units × $15 = $3,300
Total = $15,300
ii. Cost of goods sold
300 units × $12 = $3,600
630 units × $15 = $9,450
Total = $13,050
c. weighted average cost
This method recalculates the unit costs after every purchase. Sales are valued at the latest unit costs calculated.
1st calculation : April 11
Unit Cost = Total Cost ÷ Total Number of Units
= ((950 units × $12) + (300 units × $14)) ÷ (1,250)
= $12.45
Sale = 300 × $12.45
= $3,735
2nd Calculation : June 1
Unit Cost = Total Cost ÷ Total Number of Units
= ((650 units × $12.45) + (850 units × $15)) ÷ (1,500)
= $13.90
Sale = 630 × $13.90
= $8,757
ii. Cost of goods sold
Total Cost of Goods Sold = $3,735 + $8,757
= $12,492
i. Cost of ending inventory
Ending Inventory = 870 × $13.90
= $12,093
true or false If you don't think a situation is okay or acceptable, others probably don't feel the same way.
Bill and Laura are in the 39.6% tax bracket for ordinary income and the 20% bracket for capital gains (ignore the 3.8% additional tax on investment income for higher-income taxpayers.) They have owned several blocks of stock for many years. They are considering the sale of two blocks of stock. The sale of one block would produce a gain of $15,000. The sale of the other would produce a loss of $19,000. For purposes of this problem, ignore personal exemptions, itemized deductions and other phase-outs. They have no other gains or losses this year.
Required:
a. How much tax will they save if they sell the block of stock that produces a loss?
b. How much additional tax will they pay if they sell the block of stock that produces a gain?
c. What will be the impact on their taxes if they sell both blocks of stock?
Answer:
a) the maximum amount that Bill and Laura will be able to deduct during the current year is $3,000. Their remaining loss = $19,000 - $3,000 = $16,000. The remaining $16,000 loss must be carried forward and deducted in subsequent years, or year, depending on their future capital gains. Total tax saved during this year = $3,000 x 39.6% = $1,188.
b) additional tax liability = $15,000 x 20% = $3,000
c) if they sell both, then their long term capital gains = $15,000 - $19,000 = -$4,000. They can deduct $3,000 during the current year, and the remaining $1,000 loss can be deducted in subsequent years. Total tax saved during this year = $3,000 x 39.6% = $1,188.
On December 31, 2021, the end of the fiscal year, Revolutionary Industries completed the sale of its robotics business for $13.0 million. The robotics business segment qualifies as a component of the entity according to GAAP. The book value of the assets of the segment was $9.0 million. The income from operations of the segment during 2021 was $6.0 million. Pretax income from continuing operations for the year totaled $14.0 million. The income tax rate is 25%.
Required:
Prepare the lower portion of the 2021 income statement beginning with income from continuing operations before income taxes. Ignore EPS disclosures.
Answer:
Revolutionary Industries
Income Statement
For the year ended December 31, 2021
...
Pre-tax Income from continuing operations $14,000,000
Income taxes ($3,500,000)
Income from continuing operations $10,500,000
Discontinued operations:
Gain from sale of disc. component $4,000,000Income from disc. component $6,000,000Income taxes ($2,500,000) $7,500,000Net income $18,000,000
For each of the following cash flows amounts ($ millions), identify whether the company is in the introduction, growth, maturity, or decline stage of its life cycle.
Company Operating Investing Financing
Cash Flow Cash Flow Cash Flow
a $72 $2,007 $(813)
b 7 (528) 878
c (2,578) (4,198) 7,461
d (407) 5,583 (2,404)
e 2,283 (3,449) 1,909
f 6,336 3,222 (2,006)
g (403) (1,726) (3,516)
h 3,704 (2,438) 1,332
Answer:
Operating Investing Financing Identification
a $72 $2,007 $(813) Decline stage of its life cycle
b 7 (528) 878 Growth stage of its life cycle
c (2,578) (4,198) 7,461 Introduction state of its life cycle
d (407) 5,583 (2,404) Decline stage of its life cycle
e 2,283 (3,449) 1,909 Growth stage of its life cycle
f 6,336 3,222 (2,006) Maturity stage of its life cycle
g (403) (1,726) (3,516) Introduction stage of its life cycle
h 3,704 (2,438) 1,332 Growth stage of its life cycle
During the introductory phase, cash from operation and investing maybe expected to be negative and cash from financing may be positive.
During the Growth phase, a company will spend lesser inventory on accrual basis in comparison to its purchase on cash basis.
During the Maturity phase, cash from operations is expected to be positive and also might be exceeding investing requirement.
During the decline phase, cash from operations and investment would continue to be positive while cash from financing would be negative.
Reese, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December, she received a $23,000 bill from her accountant for consulting services related to her small business. Reese can pay the $23,000 bill anytime before January 30 of next year without penalty. Assume Reese’s marginal tax rate is 32 percent this year and will be 37 percent next year, and that she can earn an after-tax rate of return of 7 percent on her investments.
a. What is the after-tax cost if she pays the $39,000 bill in December?
After-tax cost 26,520
b. What is the after-tax cost if she pays the $39,000 bill in January? (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.)
After-tax cost
c. Should Reese pay the $39,000 bill'in December or Jahuary?
December
January
d. What is the after-tax cost if she expects her marginal tax rate to be 24 percent next year and pays the $39,000 bill in January? Use Exhibit 31. (Round your answer to the nearest whole dollar amount.)
After-tax cost
e. Should Reese pay the $39,000 bill in December or January if she expects her marginal tax rate to be 32 percent this year and 24 percent next year?
December
January
Answer:
a. What is the after-tax cost if she pays the $39,000 bill in December?
= $23,000 x (1 - 32%) = $15,640
b. What is the after-tax cost if she pays the $39,000 bill in January? (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.)
total after tax cost (including investment revenue):
= $23,000 x (1 - 37%) = $14,490
= -$23,000 x 7% x 1/12 x (1 - 37%) = -$84.53
= $14,405.47
c. Should Reese pay the $23,000 bill'in December or January?
January , since the after tax cost is lower
d. What is the after-tax cost if she expects her marginal tax rate to be 24 percent next year and pays the $23,000 bill in January?
= $23,000 x (1 - 24%) = $17,480
= -$23,000 x 7% x 1/12 x (1 - 24%) = -$101.97
= $17,378.03
e. Should Reese pay the $23,000 bill in December or January if she expects her marginal tax rate to be 32 percent this year and 24 percent next year?
December, since the after tax cost is lower
Where does the money you pay for the FICA tax on your paycheck go?
Answer:
see below
Explanation:
Social security and medicare taxes form the Federal Insurance Contributions Act (FICA) tax. These taxes are deducted from both the employer and employee per paycheck.
Social security tax forms the bulk of the FICA tax. The tax revenue collected as social security tax funds the United States government Social Security Trusts. The trusts are programs managed by the Social Security administration and include
Retirement benefitsSurvivor benefitsDisability benefitsMedicare tax revenue funds Federal government medicare programs. This program caters to older American health care costs. The government's general revenue also finances health care. Medicare or health services in the USA are not solely dependent on medicare tax.
A private investment club has $300,000 earmarked for investment in stocks. To arrive at an acceptable overall level of risk, the stocks that management is considering have been classified into three categories: high-risk, medium-risk, and low-risk. Management estimates that high-risk stocks will have a return rate of 15%; medium-risk stocks, 10%; and low-risk stocks, 6%. The members have decided that the investment in low-risk stocks should be equal to the sum of the investments in the stocks of the other two categories. Determine how much the club should invest in each type of stock if the investment goal is to have a return of $30,000 on the total investment. (Assume that all the money available for investment is invested. Let x, y, and z denote the amount, in dollars, invested in high-, medium-, and low-risk stocks, respectively.)
Answer:
Investment in low risk=$150,000
Investment in medium risk =$30,000
Investment in high risk=$120,000
Explanation:
✓We can denote the investment in high risk as $x
✓ We can denote the investment medium risk as $y
✓We can denote the investment in low risk as($x + $y)
The summation of the investment = x + y +( x + y )= $300,000
If we add the like-terms together we have,
2x + 2y = $300,000
If we divide the both sides by 2, we have
x+y = 150,000
If we make "x" as subject of the formula, we have
x =150,000 -y •••••••••••eqn(**)
Total return on investments is
0.15x +0.10y +0 .06(x+y) = $30,000••••••••••••••••••••••••••••eqn(#)
Substitute for x from eqn(**) into equation (#)
0.15(150,000 -y) + 0.10y + 0.06(150,000-y +y) = 30,000
22500-0.15y+0.10y+9000= 30,000
0.05y=1500
y=1500/0.05
y=30,000
Recall, x =150,000 -y
Then
x = 150,000 - 30,000 = 120,000
y=30,000
x=120,000
Investment in low risk = x + y
= 30,000+120,000= 150,000
Hence, the investment in high risk
is $120,000, the investment medium risk is $30,000 and the investment in low risk is $ 150,000.
Assume that Jackson is a price-taker and the current wholesale market price is $7.30 per can of paint. What is the target total of cost in producing and selling 6 million cans of paint? Given Jackson's current total costs, will the company reach stockholders' profit goals? Begin by calculating Jackson's target total cost. Select the formula labels and enter the amounts. (Enter currency amounts in dollars, not in millions. Round all currency amounts to the nearest whole dollar.) Revenue at market price $43,800,000 Less: Desired profit 6000000 Target total cost 31,800,000
Answer:
Jackson's target total cost of producing and selling 6 million cans of paint of $31,800,000 will enable it to reach stockholders' profit goals of $6 million.
The implication is that it should not allow its total costs (Production and other business expenses) to exceed $37,800,000.
This is because its sales revenue will be equal to $43,800,000 (6,000,000 * $7.30).
As such, Jackson can produce a can of paint for $5.30. It can also incur an average business expense of $1.00 per can to maintain and reach its $6 million profit target.
Explanation:
Profit is the difference obtained after deducting all costs from the revenue. There are some profit stages. The first is the gross profit, which considers the sales revenue and the cost of goods sold. The next profit stage is the operating profit, which subtracts the business running expenses from the gross profit. There are also profits before and after interest and taxes. The after tax profit is also called the net income or net profit. If it is negative, then it is called the net loss. It is from the net income that distributions are made to stockholders in the form of dividends while a part is retained in the business to increase its capital stock or stockholders' equity.
Hours needed to make 1 Quantity produced in 2400 hours
Car Airplane Car Airplane
Japan 30 150 80 16
Korea 50 150 48 16
Without trade, Japan produced and consumed 50 cars and 6 airplanes and Korea produced and consumed 27 cars and 7 airplanes. Then, each country agreed to specialize in the production of the good in which it has a comparative advantage and trade 28 cars for 8 airplanes. As a result, Japan gained.
a. 0 cars and 2 airplanes and Korea gained 1 car and 1 airplane.
b. 2 cars and 2 airplanes and Korea gained 1 car and 1 airplane.
c. 28 cars and 8 airplanes and Korea gained 28 cars and 8 airplanes.
d. 52 cars and 8 airplanes and Korea gained 28 cars and 8 airplanes.
Answer:
b. 2 cars and 2 airplanes and Korea gained 1 car and 1 airplane.
Explanation:
hours needed units produced in 2,400 hours
Car Airplane Car Airplane
Japan 30 150 80 16
Korea 50 150 48 16
without trade, Japan consumes 50 cars and 6 airplanes
without trade, Korea consumes 27 cars and 7 airplanes
Japan's opportunity cost to produce 1 plane = 150 / 30 = 5 cars
Japan's opportunity cost to produce 1 car = 30 / 150 = 0.2 planes
Korea's opportunity cost to produce 1 plane = 150 / 50 = 3 cars
Korea's opportunity cost to produce 1 car = 50 / 150 = 0.33 planes
Japan will produce 80 cars and Korea 16 airplanes
after trade
Japan will receive 8 airplanes in exchange for 28 cars:
it will have 8 airplanes and 52 cars
Korean will receive 28 cars in exchange for 8 airplanes:
it will have 8 airplanes and 28 cars
Question 9
5 p
(02.02 LC)
Which of the following is a characteristic of a checking account?
Easy access to funds through a debit card
Fee charged if money is removed early
High rate of return on deposits
Minimum money amount requirement to invest
Answer:
Easy access to funds through a debit card
Explanation:
A checking account is an account that individuals open at a bank or a financial institution to withdraw and deposit money. It is also referred to as a demand account. The salient feature with a checking account is that it is very liquid. It permits users a quick way of accessing their money.
A checking account can be accessed using ATMs, electronic cards, and checks. The checking account allows users to deposit and withdraw money multiple times without attracting charges.
Managers and leaders perform many tasks as a result of their goals and objectives. Even though many tasks may be completed as a result of their responsibilities, each task may be categorized into one of four functions of management.
Management is a process. This process is what allows managers and leaders to achieve organizational and personal goals. Included within this process are four functions of management. These four functions include planning, organizing, leading, and controlling. Each of these functions is an important aspect of the management process and must be implemented to achieve organizational goals. Match these functions with the followings.
a. Paul
b. Santiago
c. Matthew
d. Chioe
e. Kelly
f. Tomasz
g. Ava
h. Michelle
Answer:
a). Paul - Planning
b). Santiago - Organizing
c). Mathew - Planning
d). Chioe - Organizing
e). Kelly Tomasz - Leading
f). Ava - Controlling
g). Michelle - Organizing
Explanation:
Planning is described as the process of setting up the goals for the organization and formulating a course of action to achieve the intended goals.
Organizing is followed by planning which aims to assign the resources in a specific manner to ensure the effective accomplishment of the goal.
Leading is the process of providing guidance or direction to the staff, employees, and workers and keeps them motivated to ensure the smooth functioning of the process and achievement of optimum output.
Controlling is the last step in which the performances are governed and assessed as per the standards to find any variation.
Whipple Corp. just issued 325,000 bonds with a coupon rate of 6.29 percent paid semiannually that mature in 30 years. The bonds have a YTM of 6.73 percent and have a par value of $2,000. How much money was raised from the sale of the bonds? (Round your intermediate calculations to two decimal places and final answer to the nearest whole dollar amount.)
Answer:
la bilirrubina me duve a 100
Which of the following statements is CORRECT? a. The optimal capital structure minimizes the cost of equity, which is a necessary condition for maximizing the stock price. b. The optimal capital structure simultaneously maximizes stock price and minimizes the WACC. c. The optimal capital structure simultaneously maximizes EPS and minimizes the WACC. d. As a rule, the optimal capital structure is found by determining the debt-equity mix that maximizes expected EPS. e. The optimal capital structure simultaneously minimizes the cost of debt, the cost of equity, and the WACC.
Answer: b. The optimal capital structure simultaneously maximizes stock price and minimizes the WACC
Explanation:
The optimal capital structure is simply defined as the capital structure of a company that's made up of debt and equity which helps a business in achieving its aim.
The optimal capital structure simultaneously maximizes stock price and minimizes the WACC. As economic agents always look out to maximize stock price, it should be noted that this can be achieved with a cost of capital that's at its minimum.
Use the following data to calculate the current ratio.
Kingbird, Inc. Balance Sheet December 31, 2022
Cash and cash equivalents $68000 Accounts payable $135500
Accounts receivable 103500 Salaries and wages payable 12300
Inventory 144500 Bonds payable 166000
Prepaid insurance 90000 Total liabilities $313800
Stock investments 181500
Land 195000
Buildings $225000 Common stock $239200
Less: Accumulated depreciation (64000) 161000 Retained earnings 502500
Trademarks 112000 Total stockholders' equity $741700
Total assets $1055500 Total liabilities and stockholders' equity $1055500
Answer:
Kingbird, Inc.
Current Ratio = Current Assets/Current Liabilities
= $406,000/$147,800
= 2.75
Explanation:
a) Data and Calculations:
Kingbird, Inc. Balance Sheet December 31, 2022
Cash and cash equivalents $68000 Accounts payable $135500
Accounts receivable 103500 Salaries & wages payable 12300
Inventory 144500 Bonds payable 166000
Prepaid insurance 90000 Total liabilities $313800
Stock investments 181500
Land 195000
Buildings $225000 Common stock $239200
Less: Accumulated
depreciation (64000) 161000 Retained earnings 502500
Trademarks 112000 Total stockholders' equity $741700
Total assets $1055500 Total liabilities and stockholders'
equity $1055500
Current Assets:
Cash and cash equivalents $68,000
Accounts receivable 103,500
Inventory 144,500
Prepaid insurance 90,000
Total current assets $406,000
Current Liabilities:
Accounts payable $135,500
Salaries & wages payable 12,300
Total current liabilities $147,800
Steve owns Barb, Inc. and has grown the business over the last 15 years and is the sole owner. He decides to sell 40 percent of the corporate stock (all outstanding stock) on July 1, Year 1 to an ESOP for $8 million. His adjusted basis for his entire interest in the stock was $3 million. On February 4th, Year 2, Steve uses all $8 million to buy shares of Apple Stock. Which of the following statements is correct? a. Steve will not have a capital gain in Year 1 for tax purposes. b. He will have a capital gain of $5.0 million in Year 1 for tax purposes. c. Steve's transaction does not qualify for non-recognition of gain treatment. d. He will have a capital gain of $6.8 million in Year 1 for tax purposes.
Answer:
a. Steve will not have a capital gain in Year 1 for tax purposes.
Explanation:
Since Steve (the owner of Barb) sold his stocks to an ESOP (employee stock ownership plan), then he will be able to avoid capital gains taxes at least for the first year. ESOPs are qualified retirement plans and when they invest in stocks of the same sponsoring company, the transaction is not taxed if the seller reinvests (buys other stocks). As long as ESOP holds at least 30% of the company's stocks, then Steve can defer his taxes.
Luke sold a building and the land on which the building sits to his wholly owned corporation, Studemont Corp. at fair market value. The fair market value of the building was determined to be $502,500; Luke built the building several years ago at a cost of $375,000. Luke had claimed $56,500 of depreciation expense on the building. The fair market value of the land was determined to be $254,000 at the time of the sale; Luke purchased the land many years ago for $147,750.a. What is the amount and character of Luke’s recognized gain or loss on the building?b. What is the amount and character of Luke’s recognized gain or loss on the land?---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Aruna, a sole proprietor, wants to sell two assets that she no longer needs for her business. Both assets qualify as §1231 assets. The first is machinery and will generate a $16,250 §1231 loss on the sale. The second is land that will generate a $7,300 §1231 gain on the sale. Aruna’s ordinary marginal tax rate is 30 percent. (Input all amounts as positive values.)a. Assuming she sells both assets in December of year 1 (the current year), what effect will the sales have on Aruna’s tax liability?b. Assuming that Aruna sells the land in December of year 1 and the machinery in January of year 2, what effect will the sales have on Aruna’s tax liability for each year?
Answer and Explanation:
Answer and explanation attached
Margie Johnson is a staff accountant at ToolEx Company, a manufacturer of tools and equipment. The company is under pressure from investors to increase earnings, and the president of the expects the Accounting Department to "make this happen". Margie's boss, who has been a mentor to her, is concerned that if earnings do not increase, he will be terminated. Shortly after the end of the fiscal year, the company performs a physical count of the inventory. When Margie compares the physical count to the balance in the inventory account, she finds a significant amount of inventory shrinkage. The amount is so large that it will result in a significant drop in earnings this period. Margie's boss asks her not to make the adjusting entry for shrinkage this period. He assures her that they will get "caught up" on shrinkage in the next period, after the pressure is off to reach this period's earnings goal. Margie's boss asks her to do this as a personal favor to him.
Required:
What should Margie do in this situation? Why?
Answer and Explanation:
1. Margie Johnson would be ethically wrong if she grants the boss's favour to not report inventory shrinkage. Also financial statements would not show a true and fair view if she decides to follow what her boss is asking. She should report true inventory value in financial statements.
2. Yes Ryan is being professional since he is out to improve company's sales and income even though he may be putting pressure on employees to work overtime
I learned that before application of shampoo it is important to
Answer:
oil it I think!
Explanation:
massage hair oil into the scalp before shampooing it!
Required information The Ferre Publishing Company has three service departments and two operating departments. Selected data from a recent period on the five departments follow: Service Departments Operating Departments Administration Janitorial Maintenance Binding Printing Total Costs $168,000 $126,000 $57,600 $330,000 $516,000 $1,197,600 Number of employees 60 35 140 315 210 760 Square feet of space occupied 15,000 10,000 20,000 40,000 100,000 185,000 Hours of press time 30,000 60,000 90,000 Administration is allocated based on number of employees; Janitorial based on space occupied; and Maintenance based on hours of press time. Required: Assuming that the company uses the direct method to allocate service department costs, how much cost would be assigned to each operating department
Answer:
The Ferre Publishing Company
Allocation of Cost to Each Department under the Direct Method;
Service Departments Operating Departments
Admini Janitorial Mainten Binding Printing Total
-stration -ance
Costs $168,000 $126,000 $57,600 $330,000 $516,000 $1,197,600
Admin. (168,000) 100,800 67,200 0
Janitorial (126,000) 36,000 90,000 0
Maintenance (57,600) 19,200 38,400 0
Total assigned cost $486,000 $711,600 $1,197,600
Explanation:
a) Data and Calculations:
Service Departments Operating Departments
Admini Janitorial Mainten Binding Printing Total
-stration -ance
Costs $168,000 $126,000 $57,600 $330,000 $516,000 $1,197,600 Number of
employees 60 35 140 315 210 760
Square feet of space
occupied 15,000 10,000 20,000 40,000 100,000 185,000 Hours of press time 30,000 60,000 90,000
Allocation basis Allocation Basis Allocation Rate Calculation
Administration Number of employees $320/employee ($168,000/525)
Janitorial Space occupied $0.90/space ($126,000/140,000)
Maintenance Hours of press time $0.64/press time ($57,600/90,000)
The direct method is one of the methods that The Ferre Publishing Company can use to allocate the overhead costs of the three service departments: Administration, Janitorial, and Maintenance to the Operating Departments: Binding and Printing. Others are the Step method and the Reciprocal method. The Step method allocates one service costs to some other service departments one by one. The Reciprocal relies on an elimination formula.
Problem 6-10 (Algo) Long-term contract; revenue recognition over time [LO6-8, 6-9] [The following information applies to the questions displayed below.] In 2021, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2023. Information related to the contract is as follows: 2021 2022 2023 Cost incurred during the year $ 2,580,000 $ 4,042,000 $ 2,175,800 Estimated costs to complete as of year-end 6,020,000 1,978,000 0 Billings during the year 2,060,000 4,562,000 3,378,000 Cash collections during the year 1,830,000 4,200,000 3,970,000 Westgate recognizes revenue over time according to percentage of completion. Problem 6-10 (Algo) Part 4 4. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. Loss amounts should be indicated with a minus sign.) 2021 2022 2023 Costs incurred during the year $ 2,580,000 $ 3,830,000 $ 3,230,000 Estimated costs to complete as of year-end 6,020,000 3,130,000 0
Answer:
revenue recognized
2021 = $3,000,000 2022 = $4,700,000 2023 = $2,300,000
gross profit
2021 = $420,000 2022 = $658,000 2023 = $124,200
Explanation:
Percentage of 2021 2022 2023
completion method
Cost incurred in $0 $2,580,000 $6,622,000
previous year
+ Cost incurred $2,580,000 $4.042,000 $2,175,800
during the year
Total cost incurred $2,580,000 $6,622,000 $8,797,800
+ Estimated cost to $6,020,000 $1,978,000 $0
be incurred
Total estimated cost $8,600,000 $8,600,000 $8,797,800
to be incurred
Percentage of 30% 77% 100%
completion
Total revenue $10,000,000 $10,000,000 $10,000,000
Total revenue $3,000,000 $7,700,000 $10,000,000
recognized (% of completion x total revenue)
- Revenue recognized ($0) ($3,000,000) ($7,200,000)
in previous year
= revenue recognized $3,000,000 $4,700,000 $2,300,000
in current year
gain/loss 2021 2022 2023
Revenue $3,000,000 $4,700,000 $2,300,000
- Cost incurred ($2,580,000) ($4,042,000) ($2,175,800)
Gross profit $420,000 $658,000 $124,200
On January 1, year 2, Connor Corporation signed a $100,000 noninterest-bearing note due in three years at a discount rate of 10%. Connor elects to use the fair value option for reporting its financial liabilities. On December 31, year 2, Connor's credit rating and risk factors indicated that the rate of interest applicable to its borrowings was 9%. The present value factors at 10% and 9% are presented below. PV factor 10%, 3 periods .751 PV factor 10%, 2 periods .826 PV factor 10%, 1 period .909 PV factor 9%, 3 periods .772 PV factor 9%, 2 periods .842 PV factor 9%, 1 period .917 At what amount should Connor present the note on the December 31, year 2 balance sheet?
Answer:
$84,200
Explanation:
The computation of the amount that should be presented the note as on Dec 31 for year 2 is shown below:
= PV factor 9%, 2 periods × non-interest bearing note amount
= 0.842 × $100,000
= $84,200
Here we considered the 9% interest rate as it is the revalued with respect to the fair value and the same is to be considered
1. The physical effort of the manpower to produce the basic needs of the
consumers, describes which factor of production?
a) Land
b) Capital
c) Labor
d) Entrepreneur
Answer:
b. capitalis the answer....✌️
The factor of production called Labour produce the basic needs.
Let understand that the factor of production are essentially what are used in production process to produce goods and services for final consumers.
Land, Labor, Capital and Entrepreneur are the four factors of production. Successful production process relies on the functionality of these factors.The land encompasses where resources and raw materials are derived.The capital involves the money spent during production.The Labor involves manpower of human required in the production process.In conclusion, the Labor is the term that describes the physical effort of the manpower to produce the basic needs of the consumers.
Learn more about Factor of production here
brainly.com/question/12663287
Race and gender are examples of _____.
social issues
personality disorders
discrimination
diversity issues
Answer:
I think the answer is D.
Vera Ernst is a licensed dentist. During the first month of the operation of her business, the following events and transactions occurred.
April 1 Invested $20,000 cash in her business.
1 Hired a secretary-receptionist at a salary of $700 per week payable monthly.
2 Paid office rent for the month $1,500.
3 Purchased dental supplies on account from Dazzle Company $4,000.
10 Performed dental services and billed insurance companies $5,100.
11 Received $1,000 cash advance from Leah Mataruka for an implant.
20 Received $2,100 cash for services performed from Michael Santos.
30 Paid secretary-receptionist for the month $2,800.
30 Paid $2,600 to Dazzle for accounts payable due.
Required:
Journalize the transactions.
Answer:
April 1 Invested $20,000 cash in her business.
Dr Cash 20,000
Cr Vera, Ernst, capital 20,000
1 Hired a secretary-receptionist at a salary of $700 per week payable monthly.
no journal entry required
2 Paid office rent for the month $1,500.
Dr Rent expense 1,500
Cr Cash 1,500
3 Purchased dental supplies on account from Dazzle Company $4,000.
Dr Supplies 4,000
Cr Accounts payable 4,000
10 Performed dental services and billed insurance companies $5,100.
Dr Accounts receivable 5,100
Cr Service revenue 5,100
11 Received $1,000 cash advance from Leah Mataruka for an implant.
Dr Cash 1,000
Cr Deferred revenue 1,000
20 Received $2,100 cash for services performed from Michael Santos.
Dr Cash 2,100
Cr Service revenue 2,100
30 Paid secretary-receptionist for the month $2,800.
Dr Wages expense 2,800
Cr Cash 2,800
30 Paid $2,600 to Dazzle for accounts payable due.
Dr Accounts payable 2,600
Cr Cash 2,600
Question 5 of 10
Which problem is more likely to affect a partnership than a sole
proprietorship?
A. The company will have a difficult time raising funds to get started.
B. The company falls apart if one owner dies or chooses to leave.
оооо
C. One person has total liability if the company loses money.
D. Owners have disagreements over how to run the business.
Answer:
D
Explanation:
owners have disagreement over how to run the business
A legal entity between at least two individuals who invest money and run a business is referred to as a partnership. A partnership is distinct from the partners as people, as contrast to a sole proprietorship.
There is a flow-through arrangement for general partnerships, which directs profits and losses to each partner's personal tax return.
what are disadvantages of partnership?A partnership's drawbacks include the fact that each owner or member is subject to unlimited liability for their actions within the company, transferability can be challenging to achieve.a partnership is unstable as it can dissolve when just one partner no longer wants to be involved in the company or is unable to do so.One of the main causes of business dissolution is conflict between partners who share the business equally.It will be expensive to lose a business partner since you will have to assess their assets and find someone else to take over for them as they have assumed a lot of responsibilities.learn more about problem more likely to effect a partnership here https://brainly.com/question/17440771
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