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3 years ago

Freda's Florist reported the following before-tax income statement items for the year ended December 31, 2016:

Business

1 answer:

Shalnov [3]3 years ago

5 0

Answer:

Option (C) is correct.

Explanation:

Income tax expense:

= Operating income × Income tax rate

= $250,000 × 40%

= $100,000

Total income tax expense:

= (Operating income + Income on discontinued operations) × Income tax rate

= ($250,000 + $70,000) × 40%

= $128,000

Therefore, Freda's separately stated income tax expense and total income tax expense would be $100,000 and $128,000, respectively.

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A business chartered by a state that legally operates as a separate entity from the owner(s) is called

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A business operated by state legally...... is called corporation

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g "1. How would each of the following events change the equilibrium financial market value of a company? (a)an increase in its c

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Answer:

a. Decrease

b. Decrease

c. Decrease

d. Increase

e. Increase

Explanation:

a. When the company's cost of production increases, this reduces the amount of profits they make. A lower than expected profit margin is frowned upon in the Financial market therefore some people will sell their shares in the company which will have the effect of decreasing market value.

b. An increase in a firm's cost of financing signals an increase in the riskiness of a company. It also means that the company will be paying more on interest which will reduce profits. These 2 thing will drive some investors away thereby reducing the market value.

c. A firm's value can be found by discounting its projected sales and dividends amongst others with a certain discount rate. If a higher rate is used, the present value and hence the market value figure will be less.

d. When there is an increase in Sales revenue, it signals profitability for a company. Investors love profitable companies and will buy more of the company stock which will drive up the price.

e. Projected future profits can be used to calculate present value as well as serve as an indication of future profitability. Investors will buy more shares and drive up the market value.

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3 years ago

Sooner Machinery Company purchased a delivery truck at a cost of $56,000 on March 10, 2018. The truck has a useful life of six y

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Answer:

Results are below.

Explanation:

Giving the following information:

Purchase price= $56,000

Useful life= 6 yearsd

Salvage value= $5,000

a. To calculate the annual depreciation, we need to use the following formula:

Annual depreciation= (original cost - salvage value)/estimated life (years)

Annual depreciation= (56,000 - 5,000) / 6= $8,500

Year 1:

Annual depreciation= (8,500/12)*10= $7,083.33

Year 2:

Annual depreciation= $8,500

b. To calculate the annual depreciation, we need to use the following formula:

Annual depreciation= 1.5*[(book value)/estimated life (years)]

Year 1:

Annual depreciation= [(1.5*8,500)/12]*10= $10,625

Year 2:

Annual depreciation= [(51,000 - 10,625)/6]*1.5

Annual depreciation= $10,093.75

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3 years ago

Kamath-Meier Corporation's CFO uses this equation, which was developed by regressing inventories on sales over the past 5 years,

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Answer:

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Explanation:

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Annual sales growth rate =32%

sales for next year = 300 + (300*32%)

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