Answer:
Amount of underapplied or overapplied overhead cost for the year
$97000 - Underapplied
Schedule of cost of goods manufactured for the year
Direct Material 3885000
Direct Labor 60000
Overheads 376000
Total Manufacturing Costs 4321000
Add Opening Inventory WIP 400000
Less Closing Inventory WIP (700000)
Cost of Goods Manufactured 4021000
Explanation:
Amount of underapplied or overapplied overhead cost for the year
Underapplied or Overapplied overhead cost =Actual Overhead - Applied Overhead
$473000-$376000= $ 97000
Schedule of cost of goods manufactured for the year
<em>Direct Materials Calculation </em>
Opening 200000
Add Purchases 4000000
Available 4200000
Less Closing Material 300000
Materials Consumed 3900000
Less Indirect Materials 15000
Direct Materials Consumed 3885000
Answer:
Entry to record adjustment:
COGS Dr $9.4m
Inventory Cr $9.4m
Explanation:
The question relates to a change in accounting policy. According to IAS 8 (changes in accounting policy and estimate), a change in accounting policy is to be reflected retrospectively and prospectively, which means any changes should be implemented by bringing changes in the past records. Since CPS company has been using FIFO method, the inventory has been overstated in the financial statements. A shift to AVCO has resulted in a decrease in inventory value.
The value of inventory has to be reduced as a result of change in accounting policy (i.e $38m - $28.6m). This is the closing inventory so a reduction in the value of closing inventory results in an increase in cost of goods sold (COGS), therefore, the adjusting entry will be aimed at reducing inventory and increasing cost of goods sold, see as follows:
Entry:
COGS Dr $9.4m
Inventory Cr $9.4m
Goods were able to be produced faster and more efficiently.
When will shareholders of C businesses that retain their post-tax profits be subject to individual income tax on those retained profits. When shareholders sell their shares for a profit, they must pay taxes.
C corporations will pay tax at a corporate rate of 21% as of the 2020 tax year (down from 35 percent in 2017). Then, dividends are taxed at the owner's personal marginal tax rate, which is up to 37%. (depending on the tax bracket).
Distributions of money or other assets to shareholders will lower the corporation's earnings and profits (E&P), but they won't affect its taxable income. Taxes are paid by the corporation on its taxable income and by the shareholders on any dividends they receive.
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