Answer:
a. Transaction 1
It is not deductible so the Taxable income is $9,000
Transaction 2
It is deductible, taxable income would be;
= 13,500 * ( 1 - Tax)
= 13,500 * ( 1 - 20%)
= $10,800
b. Transaction 1
It is not deductible so the Taxable income is $9,000
Transaction 2
It is deductible, taxable income would be;
= 13,500 * ( 1 - Tax)
= 13,500 * ( 1 - 40%)
= $8,100
Answer:
Sparrow Co's automobiles are premium brands that command premium prices
Explanation:
The fact that both automobile makers incurs the same cost of $9,000 is just one of many factors to consider because the processes involved in manufacturing are not necessarily the same.
Besides,the level of workforce efficiency and the state of technology deployed are not necessarily the same.
It could also be that Sparrow Co. was able to achieve same level of cost with Bison Autos because it adopted modern cost reductions techniques such as Just-In Time which eliminates the need to keep inventory, thereby eliminating excessive costs of holding inventory.
All in all,Sparrow Co,could project itself as a maker of high-end brands and increase prices as appropriate.
- Companies buyback shares for a variety of reasons, including firm consolidation, increased equity value, and to appear more financially appealing.
-The disadvantage of buybacks is that they are frequently financed with debt, putting a burden on cash flow.
-Stock repurchases can have a modestly favorable impact on the economy as a whole.
Answer:
her recognized gain on the sale of her old principal residence is $193,000 and her basis in the inherited home is $600,000.
Explanation:
Recognized gain on sale of old house
= ($600,000 - $125000) - $30,000 - $2000
= $443,000
Paula's recognized gain = $443,000 - $250,000
= $193,000
Her basis in the inherited home = $500,000 + $100,000
= $600,000
Therefore, her recognized gain on the sale of her old principal residence is $193,000 and her basis in the inherited home is $600,000.
