Question 6 of 10

Lipstik, Inc. makes cosmetics. Lipstik intentionally mislabels its packaged products to conceal a defect. Trusting and relying o

Zanzabum

Answer:

Fraud.

Explanation:

Fraud is defined as intentional misrepresentation aimed at gaining unlawful advantage or to deprive a victim of a legal right.

In civil law the victim can file for recovery of money, while in criminal law the fraud perpetrator may be committed to prison.

Lipstik intentionally mislabels its packaged products to conceal a defect, and gains unfair advantage by selling these defective goods to customers. Mikayla buys the lipstick based on the misrepresented information on the label and gets injured.

8 0

2 years ago

Kirov, Inc. reports credit sales of $200,000 for the year ending December 31. The year-end unadjusted balance of its Allowance f

zubka84 [21]

Answer:

The correct answer is: $12,000

Explanation:

uncollectible debt = 6% of net sales

= 6/100 × 200,000

= 0.06 × 200,000 = $12,000

Therefore, $12,000 will be removed (debited) from the bad debt expense because it is uncollectible, and it is added (credited) to the Allowance for Doubtful accounts as bad debt to be paid for in the bad debt reserve account.

7 0

3 years ago

Morrison and Greene have decided to form a partnership. They have agreed that Morrison is to invest $150,000 and that Greene is

Gekata [30.6K]

Answer:

1) net income = $115,000

a) Morrison receives $57,500

Greene receives $57,500

b) Morrison receives $86,250

Greene receives $28,750

c) Morrison receives $38,333

Greene receives $76,667

d) Morrison receives ($150,000 x 6%) + $51,500 = $60,500

Greene receives ($50,000 x 6%) + $51,500 = $54,500

e) Morrison receives $3,750 + $40,000 = $43,750

Greene receives $1,250 + $70,000 = $71,250

f) Morrison receives $3,750 + $40,000 = $43,750

Greene receives $1,250 + $70,000 = $71,250

2) net income = $200,000

a) Morrison receives $100,000

Greene receives $100,000

b) Morrison receives $150,000

Greene receives $50,000

c) Morrison receives $66,667

Greene receives $133,333

d) Morrison receives $9,000 + $94,000 = $101,000

Greene receives $3,000 + $94,000 = $97,000

e) Morrison receives $9,000 + $40,000 + $39,000 = $88,000

Greene receives $3,000 + $70,000 + $39,000 = $112,000

f) Morrison receives $9,000 + $40,000 + $30,000 = $79,000

Greene receives $3,000 + $70,000 + $18,000 + $30,000 = $121,000

8 0

3 years ago

Riverrun Co. provides medical care and insurance benefits to its retirees. In the current year, Riverrun agrees to pay $13,500 f

gtnhenbr [62]

Answer:

Dr. Employee Benefits expense $22,700

Cr. Medical Insurance payable $13,500

Cr. Employee retirement program payable $9,200

Explanation:

The cost of fringe benefit provided to the employee of the company and any tax component attached to it is known as the employee benefit expense.

Total employee benefit expense is the sum of medical insurance and employee retirement program. As medical insurance and retirement program is payable until now so, it is recorded as a liability.

Employee benefit expense = $13,500 + $9,200 = $22,700

3 0

2 years ago

Baltimore Inc. reported pretax GAAP income of $45,000 in 2020. In analyzing differences between GAAP income and taxable income,

Reptile [31]

Answer:

Baltimore Inc.

a. Total taxable income = $47,200

b. Income tax payable = $11,800

c. Income tax expense = $11,250

d. Net income = $33,750

Explanation:

a) Data and Calculations:

GAAP determined pretax income = $45,000

Add nondeductible fines 5,000

Less exempt municipal interest revenue 2,800

Total taxable income $47,200

Income tax (25%) 11,800

Income tax expense:

GAAP determined pretax income = $45,000

Income tax (25%) 11,250

Net income $33,750

b) The differences between the GAAP determined pretax income and the tax determined taxable income are due to permanent differences (not temporary). This implies that there are no deferred tax assets and liabilities and no recoveries from deferred taxes. However, in reporting its financial performance for the year, Baltimore Inc. still has to comply with the GAAP rules and not the tax rules.

8 0

3 years ago