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trapecia [35]
3 years ago
12

Consider the following financial statement for Heir Jordan Corporation. HEIR JORDAN CORPORATION Income Statement Sales $ 48,500

Costs 34,500 Taxable income $ 14,000 Taxes (35%) 4,900 Net income $ 9,100 Dividends $ 2,900 Addition to retained earnings 6,200 A 20% growth rate in sales is projected. Prepare a pro forma income statement and balance sheet assuming that costs, assets and accounts payable vary with sales, but notes payable do not. Further assume that the dividend payout ratio remains constant.
Business
1 answer:
sp2606 [1]3 years ago
4 0

Answer:

HEIR JORDAN CORPORATION

Income Statement

Sales $ 48,500 * 120%....................58,200

Costs 34,500 * 120%........................<u>41,400</u>

Taxable income $ 14,000...............<u>16,800</u>

Taxes (35%) 4,900 ...........................5,880

Net income $ 9,100 ........................<u>10,920</u>

Dividends $ 2,900 ..(31.87%)..........3,480

Former Addition to retained earnings 6,200

New Addition to retained earnings 7,440

Explanation:

Consider the following financial statement for Heir Jordan Corporation.

HEIR JORDAN CORPORATION

Income Statement

Sales $ 48,500 * 120%....................58,200

Costs 34,500 * 120%........................<u>41,400</u>

Taxable income $ 14,000...............<u>16,800</u>

Taxes (35%) 4,900 ...........................5,880

Net income $ 9,100 ........................<u>10,920</u>

Dividends $ 2,900 ..(31.87%)..........3,480

Former Addition to retained earnings 6,200

New Addition to retained earnings 7,440

Pay out ratio is 31.87% of Net income which is derived by Dividends/Net Income

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Shamrock Corp. has a deferred tax asset account with a balance of $76,000 at the end of 2019 due to a single cumulative temporar
gavmur [86]

Answer:

a.                                              Debit             Credit

deferred income taxes         $5,400

Income tax expense             $155,600            

                        Income tax payable           $161,000

b. No valuation account related to the deferred tax asset is in existence at the end of 2019, therefore no record should be make

Explanation:

a. In order to record the income tax expense, deferred income taxes, and income taxes payable for 2017 we would have to make the following calculations as follows:

deferred income taxes=($407,000×20%)-$76,000

deferred income taxes=$5,400

Income tax payable=$805,000×20%

Income tax payable=$161,000

Income tax expense=$161,000-$5,400

Income tax expense=$155,600

Therefore, the record of  income tax expense, deferred income taxes, and income taxes payable for 2017, assuming that it is more likely than not that the deferred tax asset will be realized in full would be as follows:

                                               Debit             Credit

deferred income taxes         $5,400

Income tax expense             $155,600            

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b. No valuation account related to the deferred tax asset is in existence at the end of 2019, therefore no record should be make

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3 years ago
Selected operating data for two divisions of Outback Brewing, Ltd., of Australia are given below: Division Queensland New South
Svet_ta [14]

Answer:

1. Quuen Land Division

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1. Computation for each division's margin, turnover, and return on investment (ROI)

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Using this formula

Margin =Net operating income/Total Sales

Let plug in the formula

Margin =$70,200/ $ 1,080,000

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First step is to determine the Turnover using this formula

Turnover=Total sales/Average Asset

Let plug in the formula

Turnover= $ 1,080,000 /$600,000

Turnover =1.8 times

Now let determine the ROI using this formula

ROI =Margin * Turnover

Let plug in the formula

ROI=6.50%*1.8

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NEW SOUTH WALE DIVISION MARGIN

Margin =$ 83,475 / $ 2,385,000

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NEW SOUTH WALE DIVISION ROI

First step is to determine the Turnover using this formula

Turnover=Total sales/Average Asset

Let plug in the formula

Turnover= $ 2,385,000 /$530,000

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ROI =Margin * Turnover

Let plug in the formula

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2. Based on the above calculation the divisional manager that seems to be doing the better job

Is NEW SOUTH WALE DIVISION because the ROI is greater.

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