Answer:
$173
Explanation:
The computation of the salvage value at the end of year 5 is given below:
Cost of the asset $1,200
Multiply with the depreciation rate 5.76%
Book value at the 5 year end = $69
Resale value $200
gain on sales $131
Multiply with the Capital gain 21%
tax on gain $27
After tax gain on salvage value $173 ($200 - $27)
Answer:B. Amanda must advise Sean and Dianne promptly of the inaccuracy and the consequences provided by Internal Revenue Code and Regulations.
Explanation:
Sean and Dianne have probably engaged Amanda at the end of the tax year and they are to face implications of the transactions as it relates to tax matters, Amanda is to provide them with legislation in relation to the matter to educate them in future tax transactions.
Answer:
B. A firm goes heavily into debt in order to obtain funds to purchase the shares of the public.
Explanation:
A leverage buyout refers to when any company purchases any other company by using entirely debt and secure that debt with the assets of the same company they are purchasing.
Hope this helps,
Thank You.
Answer: True.
Explanation:
Here, the statement is related to the economic theory of demand, not with economic theory of supply. So, we are considering only law of demand.
The statement is true according to the economic theory of demand.
Economic theory of demand states that other things remains constant, increase in the price of a commodity results in lower demand for that commodity and vice versa. There is an inverse relationship between the price and demand of a commodity.
Economic theory of supply states that other things remains constant, increase in the price of a commodity results in higher supply for that commodity and vice versa. There is a direct relationship between the price and supply for a commodity.
Answer:
B: $1,500 is recognized this year, $ 9,000 next year and $ 7,500 in last year of contract.
Explanation:
Steven has adopted the accrual method in recording its revenue.
Accrual is an accounting concept which means expenses and revenues are recorded by a business when they are incurred not when cash is received or paid.
Accrual basis of accounting gives more accurate and true results as compare to cash basis accounting.
The payment received in September of $ 18,000 was the income for 24 months so it was wrong to record the whole amount as an income in September.
In the first year 2 months of income is recorded for November and December ($ 18,000÷24 = $750 per month) $750 × 2 = $1500.
In the second year 12 months revenue will be recognized ($750 per month × 12 = $ 9,000)
In the last year 10 month remained out of 24 months so the income recognized was ( $750 × 10 = $ 7,500)
