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3 years ago

Revenues and expenses are transferred to the ________ account before their final transfer into the retained earnings account.

1 answer:

6 0

D is the correct answer. Income summary is a sort of "catch-all" account that holds both revenues and expenses before recording them as retained earnings. These will then be rectified at the end of the manual accounting period. If there is a net profit or loss for the business, it will be reflected during the accounting period in the income summary.

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Stone Co. begins operations in 20X9 and reports $225,000 in income before income tax for the year. Stone's 20X9 tax depreciation

Crazy boy [7]

Answer:

The answer is: Stone can report $8,750 as deferred income tax liability

Explanation:

Deferred income tax liability: income tax owed by a business that is put off into future years because a difference exists between GAAP accounting (in this case book depreciation) and income tax accounting.

The deferred tax liability is based on the difference on depreciation. Since 20x9 is Stone Co.'s first year of operations, the depreciation difference in this year must equal the net future depreciation difference.

To calculate the deferred tax liability balance we take the difference in depreciation and multiply it by the future tax rate: $25,000 x 35% = $8,750.

8 0

3 years ago

Sidewinder, Inc., has sales of $686,723, costs of $335,000, depreciation expense of $80,000, interest expense of $45,000, and a

algol13

Answer:

The addition to retained earnings is $95,751.

Explanation:

Addition to the retained earning is the net value of net earning of the year and dividend payment.

Net income

Sales $686,723

Costs ($335,000)

Gross income $351,723

Depreciation Expense ($80,000)

Income before interest and tax $271,723

Interest Expense ($45,000)

Income before tax $226,723

Tax 22% ($49,879)

Net Income $176,844

Addition to Retained Earning = Net Income - Dividend Payment

Addition to Retained Earning = $176,844 - $81,093

Addition to Retained Earning = $95,751

8 0

3 years ago

Pharoah Corporation provides its officers with bonuses based on net income. For 2017, the bonuses total $384,900 and are paid on

Keith_Richards [23]

Answer: Pharaohs journal $

Date

December 31, 2017

StaffBonusexpensesDr384,900

Accruede liability Cr384,900

Narration. Staff bonus due as at date.

February 15,2018

Accrued liability Dr 384, 900

Bank Cr. 384,900

Narration. Payment of staff bonus due

Explanation:

In line with the acrual concept of recognising expenses at the period they are due for payment. The staff bonus will be recognized as an expense to the income statement in 2017 and accrued as liability in the balance sheet if it's not paid.

The payment in 2018 will be a debit to the liability account and credit to the cash or bank account.

5 0

3 years ago

A good example of ___________________ is a real estate business that shares data on new home purchases between the unit that sel

Ghella [55]

A good example of a market data approach is a real estate business that shares data on new home purchases between the unit that sells insurance for the home and the business unit that sold the home. A market data approach allows businesses to find and sell to consumers that fit the description of their products. They can read market data that is collected from one agency and use it to sell them their product as well because they are hand in hand products.

5 0

3 years ago

A 20-year maturity bond with par value $1,000 makes semiannual coupon payments at a coupon rate of 8%. Find the bond equivalent

iren2701 [21]

Answer:

The bond equivalent yield to maturity = 8.52%

The effective annual yield to maturity of the bond = 8.71%

Explanation:

Here, we start with calculating the yield to maturity YTM using the financial calculator

To find the YTM, we need to put the following values in the financial calculator:

N = 20*2 = 40;

PV = -950;

PMT = [8%/2]*1000 = 40;

FV = 1000;

Press CPT, then I/Y, which gives us 4.26

So, Periodic Rate = 4.26%

Bond equivalent yield = Periodic Rate * No. of compounding periods in a year

= 4.26% * 2 = 8.52%

effective annual yield rate = [1 + Periodic Rate]^(No. of compounding periods in a year) - 1

= [1 + 0.0426]^2 - 1 = 1.0871 - 1 = 0.0871, or 8.71%

3 0

3 years ago

Revenues and expenses are transferred to the​ ________ account before their final transfer into the retained earnings account.

Revenues and expenses are transferred to the ________ account before their final transfer into the retained earnings account.