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GarryVolchara [31]
3 years ago
10

In its year 3 income statement, Cere Co. reported income before income taxes of $300,000. Cere estimated that, because of perman

ent differences, taxable income for year 3 would be $280,000. During year 3 Cere made estimated tax payments of $50,000, which were debited to income tax expense. Cere is subject to a 30% tax rate. What amount should Cere report as income tax expense?
Business
1 answer:
Nimfa-mama [501]3 years ago
3 0

Answer:

$84,000

Explanation:

In this case there will arise deferred tax asset as the book profit is more than taxable profit, now

Tax liability = $300,000 X 30% = $90,000

Though out of which deferred tax asset = ($300,000 - $280,000) X 30% = $6,000

Now tax expense for the year = $280,000 X 30% = $84,000

Therefore, Cere should report a tax expense of $84,000

Even though the liability is of $90,000

Final Answer

$84,000

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Levelor Company's flexible budget shows $10,710 of overhead at 75% of capacity, which was the operating level achieved during Ma
Salsk061 [2.6K]

Answer:

The correct answer is $473 (Unfavorable).

Explanation:

According to the scenario, the given data are as follows:

Actual overhead = $11,183

Budgeted Overhead = $10,710

So, we can calculate the controllable variance by using following formula:

Controllable variance  = Actual overhead - Budgeted overhead

By putting the value, we get

Controllable variance  = $11,183 - $10,710

= $473 ( Positive shows unfavorable)

= $473 (unfavorable)

3 0
3 years ago
Division A offers its product to outside markets for $30. It incurs variable costs of $11 per unit and fixed costs of $75,000 pe
olga55 [171]

Answer:

a. See part a below for the analysis.

b. We have:

1. Division A total cost = $1,131,000

2. Division A total profit or benefit = $1,509,000

3. Division B total cost = $1,320,000

4. Division A total profit or benefit = $44,000

Explanation:

Note: See the attached excel file for the calculation of calculation of costs and benefits of options available to Divisions A and B.

a. What are the costs and benefits of the alternatives available to Division A and Division B with respect to the transfer of Division A's product? Assume that Division A can market all that it can produce.

Under this condition, each analysis is based on the condition that either Division A or Division B will pay for the transportation cost.

From part a the attached excel file, we have:

1. Division A will incur a total cost of of $559,000 and gets a profit or benefit of $761,000 if it sells to the outside market.

2. Division A will incur a total cost of of $647,000 and gets a profit or benefit of $673,000 if it sells to Division B.

3. Division B will incur a total cost of $1,408,000 if it buys from Division A.

4. Division B will incur a total cost of $1,364,000 if it buys alternate supplier. It thereby saves the transportation cost of $88,000 of buying from A as a benefit.

b. How would your answer change if Division A had idle capacity sufficient to cover all of Division B's needs?

Under this condition, it is assumed that Division A will pay for the transportation cost. Therefore, Division A will sell to both the outside market and Division B.

From part b of the attached excel file, we will have the following based on this condition:

1. Division A total cost = Total cost of selling to the outside market + Total cost of selling to Division B = $559,000 + $572,000 = $1,131,000

2. Division A profit or benefit cost = Total profit or benefits of selling to the outside market + Total profit or benefits of selling to Division B = $761,000 + $748,000 = $1,509,000

3.  Division B will incur a total cost of $1,320,000 by buying from Division A. It thereby saves $44,000 (i.e. $1,364,000 - $1,320,000 = $44,000) as a benefit for not buying from alternate supplier.

Download xlsx
3 0
2 years ago
12–2. Offer and acceptance. Schmidt, the owner of a small business, has a large piece of used farm equipment for sale. He offers
Fiesta28 [93]

Answer:

Schmidt, the owner of a small business, has a large piece of used farm equipment for sale. He offers to sell the equipment to Barry for $10,000. Discuss the legal effects of the following events on the offer:  

• Schmidt dies prior to Barry’s acceptance, and at the time he accepts, Barry is unaware of Schmidt’s death.  

• The night before Barry accepts, fire destroys the equipment.  

• Barry pays $100 for a thirty-day option to purchase the equipment. During this period, Schmidt dies, and later Barry accepts the offer, knowing of Schmidt’s death.  

• Barry pays $100 for a thirty-day option to purchase the equipment. During this period, Barry dies, and Barry’s estate accepts Schmidt’s offer within the stipulated time period.

Explanation:

A contact is a binding agreement between two or more people.

Schmidt dies prior to Barry’s acceptance, and at the time he accepts, Barry is unaware of Schmidt’s death: Schmidt's death would normally null this offer but because Barry is unaware of his death at the time of acceptance, and the offer is not for a personal service, the offer holds.

The night before Barry accepts, fire destroys the equipment: there is no binding contract before a buyer accepts an offer.  

Barry pays $100 for a thirty-day option to purchase the equipment. During this period, Schmidt dies, and later Barry accepts the offer, knowing of Schmidt’s death: The option keeps the offer alive regardless of Schmidt’s death as long as Barry paid for the option .

Barry pays $100 for a thirty-day option to purchase the equipment. During this period, Barry dies, and Barry’s estate accepts Schmidt’s offer within the stipulated time period: the death of the offeree, in this case Barry, would normally nullify the offer but due to the option and the acceptance within the stipulated time,  the offer holds.

5 0
3 years ago
_____ is the amount of information a communication medium can carry and the extent to which the medium enables the sender and re
asambeis [7]

Answer:

Information richness.

Explanation:

<u>Information richness</u> is the amount of information a communication medium can carry and the extent to which the medium enables the sender and receiver to reach a common understanding. This is the correct answer to your question.

Hope this helps!!!

Kyle.

8 0
2 years ago
Prior period adjustments to financial statements can result from: Multiple Choice Changes in estimates of salvage value. Materia
AveGali [126]

The answer is  material math error.

An adjusting entry is essentially a bookkeeping modification that improves the accuracy of the financial statements by reflecting the revenue and spending on an accrual basis, which is typically but not always the case. At the conclusion of the accounting period, adjustments are made. This might happen towards the end of the month or at the end of the year.

Prior period adjustments are errors or mistakes committed in the prior reporting period. These mistakes must be remedied or eliminated by taking suitable corrective action. Prior period items include factual errors, arithmetic errors, and errors in applying accounting rules.

Therefore, material math error is the correct option.

To know more about adjustment to financial statements click here:

brainly.com/question/24178504

#SPJ4

4 0
2 years ago
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