Answer:
$3.72
Explanation:
earnings per common share = earning attributable to holder of common stock ÷ weighted average number of common stocks outstanding
therefore,
earnings per common share = $3.72
Labeau Products, Ltd., of Perth, Australia, has $21,000 to invest. The company is trying to decide between two alternative uses for the funds as follows:
Invest in Invest in
Project X Project Y
Investment required $ 21,000 $ 21,000
Annual cash inflows $ 8,000
Single cash inflow at the end of 6 years $50,000
Life of the project 6 years 6 years
The company’s discount rate is 18%.
Required:
Determine the net present values. (Any cash outflows should be indicated by a minus sign.
Answer:
Project X = $6,980.82
Project Y = - $2,478.42
Explanation:
The Present value is the price today of future cash flows and is calculated as follows :
Project X
($21,000) CF 0
$8,000 CF 1
$8,000 CF 2
$8,000 CF 3
$8,000 CF 4
$8,000 CF 5
$8,000 CF 6
I/YR = 18%
Therefore, NPV is $6,980.82
Project Y
($21,000) CF 0
$0 CF 1
$0 CF 2
$0 CF 3
$0 CF 4
$0 CF 5
$50,000 CF 6
I/YR = 18%
Therefore, NPV is - $2,478.42
The Foundational 15 (Static) [LO13-2, LO13-3, LO13-4, LO13-5, LO13-6] Skip to question [The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $120 and $80, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 100,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta Direct materials $ 30 $ 12 Direct labor 20 15 Variable manufacturing overhead 7 5 Traceable fixed manufacturing overhead 16 18 Variable selling expenses 12 8 Common fixed expenses 15 10 Total cost per unit $ 100 $ 68 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. Foundational 13-1 (Static) Required: 1. What is the total amount of traceable fixed manufacturing overhead for each of the two products
Answer:
Cane Company
Total traceable fixed manufacturing overhead:
Alpha = $1,600,000
Beta = $1,800,000
Explanation:
a) Data and Calculations:
Alpha Beta
Selling price per unit $120 $80
Direct materials $ 30 $ 12
Direct labor 20 15
Variable manufacturing overhead 7 5
Traceable fixed manufacturing overhead 16 18
Variable selling expenses 12 8
Common fixed expenses 15 10
Total cost per unit $ 100 $ 68
Total traceable fixed manufacturing overhead:
Alpha = $1,600,000 ($16 * 100,000)
Beta = $1,800,000 ($18 * 100,000)
Which of the following best describes the type of loss covered by the Spoilage Damage insuring agreement of the ISO Equipment Breakdown Protection Coverage Form? A. The spoilage of perishable goods resulting from breakdown of covered equipment. B. Costs to replace food labels resulting from breakdown of refrigeration equipment.
Answer:
A. The spoilage of perishable goods resulting from breakdown of covered equipment.
Explanation:
The ISO Equipment Breakdown Protection Coverage is used to compensate for losses that occur as a result of equipment breakdown. The cost covered by this type of insurance includes cost of repair of the equipment that failed along with the replacement not any property damaged as a result of equipment failure.
So when perishable goods get damaged because of breakdown of covered equipment, the ISO Equipment Breakdown Protection Coverage will cover for the loss
The following information pertains to Lightning Inc., at the end of December: Credit Sales $ 20,000 Accounts Payable 10,000 Accounts Receivable 11,800 Allowance for Uncollectible Accounts 400 credit Cash Sales 20,000 Lightning uses the aging method and estimates it will not collect 7% of accounts receivable not yet due, 20% of receivables up to 30 days past due, and 46% of receivables greater than 30 days past due. The accounts receivable balance of $11,800 consists of $7,500 not yet due, $2,300 up to 30 days past due, and $2,000 greater than 30 days past due. What is the appropriate amount of Bad Debt Expense
Answer:
The appropriate amount of Bad Debt Expense is $3,345.20.
Explanation:
The appropriate amount of Bad Debt Expense can be calculated as follows:
Bad debt expense = (Percentage of accounts receivable not yet due it will not collect * Accounts receivable not yet due) + (Percentage of receivables up to 30 days past due it will not collect * Amount of receivables up to 30 days past due) + (Parentage of receivables of receivables greater than 30 days past due it will not collect * Amount of receivables greater than 30 days past due) - Allowance for Uncollectible Accounts (credit) ……………………… (1)
Substituting the relevant values into equation (1), we have:
Bad debt expense = (7% * $7,500) + (20% + $2,300) + (46% * $2,000) - $400 = $3,345.20
Therefore, the appropriate amount of Bad Debt Expense is $3,345.20.
Benny is 57 years old and is employed by the state as a school bus driver.He has an exemplary record,with no accidents in the past 27 years.Tom,aged 31,replaces Benny.Benny intends to file a discrimination claim under the Age Discrimination in Employment Act (ADEA)with the Equal Employment Opportunity Commission.If Benny lives in a state that has not waived sovereign immunity,which of the following statements is most likely to be true?
A) Benny has a valid claim and can sue the state because he can establish all of the elements of a prima facie case.
B) Benny cannot file a claim for age discrimination under the ADEA because he is a state employee.
C) Benny is a state employee and must file his claim pursuant to the Older Workers' Benefit Protection Act.
D) Benny does not have a claim for age discrimination under the ADEA as he was replaced by an employee who is older than 30.
Answer: B. Benny cannot file a claim for age discrimination under the ADEA because he is a state employee.
Explanation:
Based on the information given in the question, since Benny lives in a state that has not waived sovereign immunity, thus simply means that Benny cannot file a claim for age discrimination under the ADEA because he is a state employee.
Eben though the Age Discrimination in the Employment Act protects workers that are 40 years and above and Benny is 57 years, it should be noted that in the states whereby sovereign immunity hasn't been waived, the state employees cannot due their employers as they're barred from doing so.
Therefore, the correct option is B.
Super Clinics offers one service that has the following annual cost and utilization estimates: Variable cost per visit $ 10 Annual direct fixed costs $50,000 Allocation of overhead costs $20,000 Expected utilization 1,000 visits What price per visit must be set if the clinic wants to make an annual profit of $10,000 on the service? A. $ 70 B. $ 80 C. $ 90 D. $100 E. $110
Answer:
C. $ 90
Explanation:
Number of visits = 1,000
Variable cost = $10 × 1,000 = $10,000
Fixed cost = $50,000
Overhead cost = $20,000
Required profit = $10,000
So,Total Cost = Variable Cost+ Fixed Cost+ Overhead Cost
= $10,000 + $50,000 + $20,000
= $80,000
Now, Price per Visit = (Total Cost+ Required Profit) ÷ Number of visits
= ($80,000 + $10,000) ÷ 1,000
= $90,000 ÷ 1,000
= $90
Computing Straight-Line and Double-Declining-Balance Depreciation
On January 2, 2016, Dechow Company purchases a machine to help manufacture a part for one of its key products. The machine cost $306,180 and is estimated to have a useful life of six years, with an expected salvage value of $32,760.
Compute each year's depreciation expense for 2016 and 2017 for each of the following depreciation methods.
a. Straight-line.
b. Double-declining balance.
Answer:
a.
2016 = $45,570
2017 = $45,570
b.
2016 = $102,080
2017 = $68,014
Explanation:
Straight line method
Straight line method charges a fixed amount of depreciation
Depreciation Charge = (Cost - Salvage Value) ÷ Estimated useful life
2016
Depreciation Charge = $45,570
2017
Depreciation Charge = $45,570
Double declining method
Double declining method charges a higher amount of depreciation at the early years and less in the later years
Depreciation Charge = 2 x SLDP x BVSLDP
2016
Depreciation Charge = 2 x 16.67 % x $306,180 = $102,080
2017
Depreciation Charge = 2 x 16.67 % x ($306,180 - $102,080) = $68,014
Are female expatriates different?.
Answer:
Explanation: Selmer and Leung (2003c) found that female expatriates have the same general adjustment as male expatriates, but with higher levels of work adjustment and better interaction adjustment. A replication study by Haslberger (2010) confirms that the adjustment patterns of male and female expatriates are different.
Answer:
yes the patterns of male and female expatriates are different
According to the attraction-selection-attrition (ASA) theory, job applicants Question 27 options: do not typically pay much heed to organizational values when applying for work. with a variety of personal characteristics are preferred by organizations, resulting in a more heterogeneous organization. avoid employment in companies whose values seem incompatible with their own values. avoid other applicants if they are competing for the same jobs.
Answer:
avoid employment in companies whose values seem incompatible with their own values.
Explanation:
Unemployment rate refers to the percentage of the total labor force in an economy, who are unemployed but seeking to be gainfully employed. The unemployment rate is divided into various types, these include;
I. Natural Rate of Unemployment (NU).
II. Frictional unemployment rate (FU).
III. Structural unemployment rate (SU).
IV. Actual unemployment rate (AU).
V. Cyclical unemployment rate (CU).
The attraction-selection-attrition (ASA) theory was developed and introduced by Benjamin Schneider. This theory typically gives the reason why a business firm or organization looks and feels the way it does with respect to the employees and employers.
According to the attraction-selection-attrition (ASA) theory, job applicants avoid employment in companies whose values seem incompatible with their own values. Also, it states that job applicants are usually attracted to colleagues having similar assumptions and values.
The management accountant for Giada's Book Store has prepared the following income statement for the most current year: Cookbook Travel Book Classics Total Sales $63,000 $179,000 $60,000 $302,000 Cost of goods sold 37,000 70,000 23,000 130,000 Contribution margin 26,000 109,000 37,000 172,000 Order and delivery processing 19,000 26,000 9,000 54,000 Rent (per sq. foot used) 3,000 3,000 3,000 9,000 Allocated corporate costs 10,000 10,000 10,000 30,000 Corporate profit $ (6,000) $70,000 $15,000 $79,000 If the cookbook product line had been discontinued prior to this year, the company would have reported ________. the same amount of corporate profits less corporate profits greater corporate profits resulting profits cannot be determined
Answer:
the company would have reported loss
"Minimum wage laws cause unemployment because the legal minimum wage is set" 9) A) above the market wage, causing labor demand to be greater than labor supply. B) below the market wage, causing labor demand to be greater than labor supply. C) too low. D) below the market wage, causing labor demand to be less than labor supply. E) above the market wage, causing labor demand to be less than labor supply.
Answer: E) above the market wage, causing labor demand to be less than labor supply.
Explanation:
Minimum wage simply refers to the lowest wage that employers can pay their workers. Minimum wage is a form of price floor which means that it's typically higher than the equilibrium or market wage.
In this case, since it's higher than the market wage, there'll be an increase in the supply of labor as those that are unemployed will be willing to work duw to the increase in the wage rate.
On the other hand, there'll be a reduction in the demand for labor as employers typically will want to reduce cost and won't be interested in employing more workers.
Therefore, the correct option is E
Wesley, who is single, listed his personal residence with a real estate agent on March 3 of the current year at a price of $390,000. He rejected several offers in the $350,000 range during the summer. Finally, on August 16, he and the purchaser signed a contract to sell for $363,000. The sale (i.e., closing) took place on September 7. The closing statement showed the following disbursements:
Real estate agent's commission $21,780
Appraisal fee 600
Exterminator's certificate 300
Recording fees 800
Mortgage to First Bank 305,000
Cash to seller 34,520
Wesley's adjusted basis for the house is $200,000. He owned and occupied the house for seven years. On October 1, 2017, Wesley purchases another residence for $325,000.
a. Wesley's recognized gain on the sale is __________
b. Wesley's adjusted basis for the new residence is ___________
c. Assume instead that the selling price is $800,000.
Wesley's recognized gain is _____________, and his adjusted basis for the new residence is __________
Answer:
a. Wesley's recognized gain on the sale is $0.
b. Wesley's adjusted basis for the new residence is $325,000
c. Assume instead that the selling price is $800,000.
Wesley's recognized gain is $326,520, and his adjusted basis for the new residence is $325,000.
Explanation:
Wesley's actual gain = $363,000 - $21,780 - $600 - $300 - $800 - $200,000 = $139,520, but it can all be excluded using section 121.
If the selling price is $800,000;
Wesley's actual gain = $800,000 - $21,780 - $600 - $300 - $800 - $200,000 = $576,520, but he can exclude $250,000, so his recognized gain = $326,520
The excess return is computed by ________ the average return for the investment. Group of answer choices subtracting the inflation rate from adding the inflation rate to subtracting the average return on the U.S. Treasury bill from adding the average return on the U.S. Treasury bill to subtracting the average return on long-term government bonds from
Answer:
The answer is "subtracting the average return on the U.S. Treasury bill from".
Explanation:
By subtracting the average annual return on the US Treasury bill form of the investment's average return, that excess return is calculated, when the risk premium is another term for excess return. After subtracting the risk-free return from its investment's annualized value, the risk premium is calculated its avg treasury bond investment is a risk-free portfolio.
Locomotive Corporation is planning to repurchase part of its common stock by issuing corporate debt. As a result, the firm’s debt–equity ratio is expected to rise from 30 percent to 50 percent. The firm currently has $3.3 million worth of debt outstanding. The cost of this debt is 9 percent per year. Locomotive expects to have an EBIT of $1.32 million per year in perpetuity. Locomotive pays no taxes.
a. What is the market value of Locomotive Corporation before and after the repurchase announcement?
b. What is the expected return on the firm’s equity before the announcement of the stock repurchase plan?
c. What is the expected return on the equity of an otherwise identical all-equity firm?
d. What is the expected return on the firm’s equity after the announcement of the stock repurchase plan?
Answer: See explanation
Explanation:
a. What is the market value of Locomotive Corporation before and after the repurchase announcement?
Equity value = Debt value / Debt to equity ratio
= 3,300,000/0.3
= 11,000,000
Market value = Debt value + Equity value
= $3,300,000 + $11,000,000
= $14,300,000
b. What is the expected return on the firm’s equity before the announcement of the stock repurchase plan?
To solve this, we need to know the interest payment first which will be:
= $3,300,000 × 9%
= $3,300,000 × 0.09
= $297000
Return on equity will now be:
= (EBIT - interest) / Equity
= (1320000 - 297000) / 11000000
= 9.30%
c. What is the expected return on the equity of an otherwise identical all-equity firm?
This will be:
= Earnings before Interest / Unlevered firm value
= 1320000 / 14300000
= 9.23%
d. What is the expected return on the firm’s equity after the announcement of the stock repurchase plan?
This will be:
= 9.23% + 50% × (9.23% - 9%)
= 9.35%
Frieda Inc. is considering a capital expansion project. The initial investment of undertaking this project is $105,500. This expansion project will last for five years. The net operating cash flows from the expansion project at the end of year 1, 2, 3, 4 and 5 are estimated to be $22,500, $25,800, $33,000, $45,936 and $58,500 respectively. Frieda has a capital structure consisting of 20% debt and 80% equity. The after-tax cost of debt is 16% and the cost of equity is 18.5%.
What is Frieda%u2019s weighted average cost of capital?
a. 16%
b. 18%
c. 24%
d. 22%
Answer:
WACC = 0.18 or 18%
Option b is the correct answer.
Explanation:
The WACC or weighted average cost of capital is the cost of a firm's capital structure that can contain one or more of the following components, namely debt, preferred stock and common equity. The formula to calculate the WACC is as follows,
WACC = wD * rD * (1-tax rate) + wP * rP + wE * rE
Where,
w represents the weight of each component D, P and E represents debt, preferred stock and common equity respectively r represents the cost of each componentrD * (1-tax rate) represents the after tax cost of debt
WACC = 0.2 * 0.16 + 0.8 * 0.185
WACC = 0.18 or 18%
Suppose you trade dollars and euros for a bank that has branches in Los Angeles and Frankfurt. You can electronically transfer the funds between the two branch locations at no cost, and trading commissions are negligible. The current dollar-per-euro exchange rate in Los Angeles is E$/EURLA=1.5653 , while in Frankfurt, it is E$/EURFR=1.586.
You can make a profit for the bank if you buy euros in _______ and sell them in _________.
Answer:
Explanation:
Profit will be made by you for the bank if you buy the Euros in Los Angeles, and sell the Euros to customers in Frankfurt...
Buying in Los Angeles comes at a price of $1 = €1.5653, then going ahead to sell in Frankfurt means you get to sell it at a rate of $1 = €1.586
Although this is a very tiny difference, of 0.0207. The reality is that when you're doing a lot of tradings that involves currency, you tend to see the profit. If for example, a total of $1 million is traded, then the profit would be $20700, which we all can attest to the fact that it's a lot of money.
You are analyzing two assets: collectible LEGO sets, and stock of Apple. In the last 5 years, LEGOs have had an annual volatility of 5%, annual return of 6%, and a CAPM beta (the correlation coefficient between the asset and the market risk-premium) of 1.6. Apple has had an annual volatility of 10%, an annual return of 8%, and a CAPM beta of 1.2. Is the following statement true or false?
According to CAPM, Apple has a higher expected return than LEGO.
Answer:
No, Apple has lower rate of return than LEGOs.
Explanation:
Risk free rate is 2% and Market risk is 9%
Expected return can be calculated by :
E(r) = Rf + beta * (Rm - Rf)
E(r) LEGOs = 2 + 1.6 * (9 - 2)
E(r) LEGOs = 13.2%
E(r) Apple = 2 + 1.2 * (9 - 2)
E(r) Apple = 10.4%
Brussels Enterprises issues bonds at par dated January 1, 2020, that have a $2,000,000 par value, mature in four years, and pay 9% interest semiannually on June 30 and December 31. 1. Record the entry for the issuance of bonds for cash on January 1. 2. Record the entry for the first semiannual interest payment and the second semiannual interest payment. 3. Record the entry for the maturity of the bonds on December 31, 2023 (assume semiannual interest is already recorded).
Answer:
1. January 1
Dr Cash $2,000,000
Cr Bonds Payable $2,000,000
2. June 30
Dr Bond Interest Expense $90,000
Cr Cash $90,000
December 31
Dr Bond Interest Expense $90,000
Cr Cash $90,000
3. December 31
Dr Bonds Payable $2,000,000
Cr Cash $2,000,000
Explanation:
1. Preparation of the journal entry to Record the issuance of bonds for cash on January 1.
January 1
Dr Cash $2,000,000
Cr Bonds Payable $2,000,000
(To Record the issuance of bonds for cash )
2. Preparation of the journal entries to Record the first semiannual interest payment and the second semiannual interest payment
June 30
Dr Bond Interest Expense $90,000
Cr Cash $90,000
(9%/2*$2,000,000)
(To Record the first semiannual interest payment)
December 31
Dr Bond Interest Expense $90,000
Cr Cash $90,000
(9%/2*$2,000,0000)
(To Record the second semiannual interest payment)
3. Preparation of the journal entry to Record the maturity of the bonds on December 31, 2023
December 31
Dr Bonds Payable $2,000,000
Cr Cash $2,000,000
(To Record bonds maturity )
Lily Company sells automatic can openers under a 75-day warranty for defective merchandise. Based on past experience, Lily estimates that 4% of the units sold will become defective during the warranty period. Management estimates that the average cost of replacing or repairing a defective unit is $20. The units sold and units defective that occurred during the last 2 months of 2020 are as follows:
Months Units Sold Units Defective Prior to December 31
November 37,300 746
December 39,300 491
Required:
a. Prepare the journal entries to record the estimated liability for warranties and the costs incurred in honoring 1,237 warranty claims.
b. Determine the estimated warranty liability at December 31 for the units sold in November and December.
Answer and Explanation:
The computation is shown below:
In November month:
Estimated defective units:
= Estimated Percentage to be defective units × Units sold
= 4% × 37,300
= 1,492
The Estimated cost of repairing defective units is
= Estimated defective units × Estimated cost of repairing the defective unit
= 1,492 × $20
= $29,840
In December month:
Estimated defective units:
= Estimated Percentage to be defective units × Units sold
= 4% × 39,300
= 1,572
The Estimated cost of repairing defective units:
= Estimated defective units × Estimated cost of repairing the defective unit
= 1,572 × $20
= $31,440
Now the Total estimated liability is
= $29,840 + $31,440
= $61,280
The Journal entries are as follows:
(a) Warranty expenses A/c Dr. $61,280
To Estimated warranty payable $61,280
(Being warranty expense is recorded)
Estimated warranty payable A/c Dr. $24,740
To Cash/ Material consume $24,740
(being cash paid is recorded)
(b) The estimated warranty liability is $61,280
Bramble Corp. purchased land as a factory site for $1305000. Bramble paid $121000 to tear down two buildings on the land. Salvage was sold for $8400. Legal fees of $5340 were paid for title investigation and making the purchase. Architect's fees were $47000. Title insurance cost $3900, and liability insurance during construction cost $4200. Excavation cost $15480. The contractor was paid $4400000. An assessment made by the city for pavement was $9900. Interest costs during construction were $251000.
1. The cost of the land that should be recorded by Wilson Co. is:_____.
a. $989,880
b. $980,480
c. $996,280
d. $986,880
The cost of the building should be recorded by Wilson Co. is:_____.
a. 2,804,840
b. 2,813,200
c. 2,803,800
d. 3,014,240
Answer:
Part 1
$1,422,940
Part 2
$331,480
Explanation:
cost of the land calculation
Purchase Price $1305000
Cost to tear down building $121000
Sale of Salvages ($8400)
Leagl fees $5340
Total $1,422,940
The cost of the land that should be recorded by Wilson Co. is: $1,422,940
cost of the building calculation
Architect's fees $47000
Insurance $3900
Liability insurance $4200
Excavation cost $15480
city for pavement $9900
Borrowing Costs $251000
Total $331,480
The cost of the building should be recorded by Wilson Co. is $331,480
oneycutt Co. is comparing two different capital structures. Plan I would result in 39,000 shares of stock and $108,000 in debt. Plan II would result in 33,000 shares of stock and $324,000 in debt. The interest rate on the debt is 7 percent. a. Ignoring taxes, compare both of these plans to an all-equity plan assuming that EBIT will be $160,000. The all-equity plan would result in 42,000 shares of stock outstanding. What is the EPS for each of these plans
Answer:
All equity plan:
EPS = $160,000 / 42,000 = $3.81
Plan I:
EPS = [$160,000 - ($108,000 x 7%)] / 39,000 = $152,440 / 39,000 = $3.91
Plan II:
EPS = [$160,000 - ($324,000 x 7%)] / 33,000 = $137,320 / 33,000 = $4.16
Plan II is better since the resulting EPS is higher than the other alternatives.
Murray Motor Company wants you to calculate its cost of common stock. During the next 12 months, the company expects to pay dividends (D1) of $1.30 per share, and the current price of its common stock is $40 per share. The expected growth rate is 5 percent. a. Compute the cost of retained earnings (Ke). (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)
A developing economy requires 1,000 hours of work to produce a television set and 10 hours of work to produce a bushel of corn. This economy has available a total of 1,000,000 hours of work per day.
Answer:
so what's your question
When converting net income to net cash provided (used) by operating activities under the indirect method increases in accounts receivable and increases in accrued liabilities are deducted. decreases in accounts payable and decreases in inventory are deducted. decreases in accounts receivable and increases in prepaid expenses are added. decreases in inventory and increases in accrued liabilities are added.
Answer:
Decrease in inventory and increases in accrued liabilities are added.
Explanation:
Match each of the following terms with the correct definition:
a. additional paid-in capital
b. issued and outstanding
c. retained earnings
d. treasury stock
e. authorized share capital
f. par value
Correct Definitions:
A. The price at which each share is recorded in the company’sbooks
B. Held by investors
C. Cumulative amount of profits that have been plowed back
D. The difference between the amount of cash raised by anequity issue and the par value of the issue
E. The maximum number of shares that can be issued withoutshareholder approval
F. The amount that the company has spent
Southern Atlantic Distributors began operations in January 2021 and purchased a delivery truck for $40,000. Southern Atlantic plans to use straight-line depreciation over a four-year expected useful life for financial reporting purposes. For tax purposes, the deduction is 45% of cost in 2021, 30% in 2022, and 25% in 2023. Pretax accounting income for 2021 was $460,000, which includes interest revenue of $68,000 from municipal governmental bonds. The enacted tax rate is 25%.
Assuming no differences between accounting income and taxable income other than those described above:
Required:
1. Complete the following table given below and prepare the journal entry to record income taxes in 2021.
2. What is Southern Atlantic’s 2021 net income?
Answer:
1. Depreciation as per books = Cost of purchase/Useful life
Depreciation as per books = $40,000/4
Depreciation as per books = $10,000
Depreciation as per tax for 2021 = Cost of purchase * Deduction rate
Depreciation as per tax for 2021 = $40,000 * 45%
Depreciation as per tax for 2021 = $18,000
Temporary difference = $18,000 - $10,000
Temporary difference = $8,000
Particulars Amount Tax Rate Tax Recorded as
Pretax accounting income $460,000
Permanent difference -$68,000
Income subject to taxation $392.00 25% $98,000 Income tax expense
Temporary difference -$8,000 25% -$2,000 Deferred tax liability
Income taxable in $384,000 25% $96,000 Income tax payable
current year
Journal Entries - Southern Atlantic Distributors
Date Particulars and Explanation Debit Credit
Income tax expense $98,000
To Income taxes payable $96,000
To Deferred tax liability $2,000
(To record income tax expense)
2. Net income for 2021 = Pretax income - Income tax expense
Net income for 2021 = $460,000 - $98,000
Net income for 2021 = $362,000
A college uses advisors who work with all students in all divisions of the college. The most useful allocation basis for the salaries of these employees would likely be: Multiple Choice number of classes offered in each division. student graduation rate. square footage of each division. number of students advised from each division. relative salaries of division heads.
Answer: number of students advised from each division
Explanation:
Waterway Industries is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures were $6400000 on March 1, $5250000 on June 1, and $8650000 on December 31. Waterway Industries borrowed $3200000 on January 1 on a 5-year, 11% note to help finance construction of the building. In addition, the company had outstanding all year a 9%, 3-year, $6440000 note payable and an 10%, 4-year, $12550000 note payable.
Required:
What are the weighted-average accumulated expenditures?
Answer:
$8,395,833
Explanation:
Calculation to determine What are the weighted-average accumulated expenditures
Weighted-average accumulated expenditures
=($6,400,000 × 10/12) + ($5,250,000 × 7/12) + ($8,650,000 × 0/12)
Weighted-average accumulated expenditures=$5,333,333+$3,062,500+0
Weighted-average accumulated expenditures=$8,395,833
Therefore the weighted-average accumulated expenditures will be $8,395,833
A foreign branch bank operates like a local bank, but legally Group of answer choices a branch bank is subject to only the banking regulations of its home country and not the country in which it operates. it is a part of the parent bank. a branch bank is subject to both the banking regulations of its home country and the country in which it operates. it is a part of the parent bank, and a branch bank is subject to both the banking regulations of its home country and the country in which it operates.
Answer:
Foreign branch
This is usually refered to as legal and operational section (part)of the parent bank. It is said that creditors of the branch have full legal rights on the bank's assets in all and also creditors of the parent bank have hold/claims on its branches' assets.
A foreign branch bank operates like a local bank, but is legally part of the the parent.
A branch bank is subject to both the banking regulations of home country and the country in which it operates (foreign country)
Explanation:
Foreign Branches
A foreign branch bank is a branch of a bank in other country. It usually operates like a local bank even though they are a section or part of the the parent legally. Thehy abide by the rules and regulations of the banking regulations of home country and also that of foreign country which their operating is based (branched)
They are commonly known to give a wide and broad range of services than a representative office. Branch Banks are used by U.S. banks to expand overseas.
Ralph, knowing that his son, Ed, desires to purchase a tract of land, promises to give him the $25,000 he needs for the purchase. Ed, relying on this promise, buys an option on the tract of land. Now Ralph wants to rescind his promise to Ed. Will Judy be required to give her daughter, Liza, the tract of land on which she has started to build, and will Ralph be required to give his son, Ed $25,000 to purchase a tract of land. Can Ralph rescind his promise?
Answer:
(a) Yes, Judy will be required to give her daughter, Liza, the tract of land on which she has started to build. Therefore, Judy cannot rescind his promise to Liza.
(b) No, Ralph will NOT be required to give his son, Ed $25,000 to purchase a tract of land. Therefore, Ralph can rescind his promise.
Explanation:
Note: This question is not complete. The complete question is therefore provided before answering the question as follows:
(a) Judy orally promises her daughter, Liza, that she will give her a tract of land for her home. Liza, as intended by Judy, gives up her homestead and takes possession of the land. Liza lives there for six months and starts construction of a home. Now Judy wants to rescind his promise to Liza.
(b) Ralph, knowing that his son, Ed, desires to purchase a tract of land, promises to give him the $25,000 he needs for the purchase. Ed, relying on this promise, buys an option on the tract of land. Now Ralph wants to rescind his promise to Ed.
Will Judy be required to give her daughter, Liza, the tract of land on which she has started to build, and will Ralph be required to give his son, Ed $25,000 to purchase a tract of land. Can Ralph rescind his promise?
Explanation of the answers is now provided as follows:
Each of the two cases will be decided based on the principle promissory estoppel.
Promissory estoppel refers to the legal principle that states that despite that there us formal consideration attached to a promise, it is still enforceable by law if the promise from the promisor makes the promisee to rely on the promise to his subsequent detriment.
(a) Will Judy be required to give her daughter, Liza, the tract of land on which she has started to build?
Yes, Judy will be required to give her daughter, Liza, the tract of land on which she has started to build.
The is because Liza has relied on the promise from Judy to her subsequent detriment by giving up her up her homestead and already starts construction of a home. Since the Judy promise from Judy induces the action of Liza that is reasonably expected by Judy, he cannot rescind his promise to Liza.
(b) Will Ralph be required to give his son, Ed $25,000 to purchase a tract of land. Can Ralph rescind his promise?
No, Ralph will NOT be required to give his son, Ed $25,000 to purchase a tract of land.
This is because there is Ed has not taken any definite and substantial action to justify that he has relied on the promise from Ralph to his subsequent detriment. It may not be possible to construe the purchase of an option on the tract of land by Ed as a definite and substantial action. Therefore, Ralph can rescind his promise.
