Answer:
$4,392
Explanation:
Sunland Company
Therefore the costs are eliminated if they outsource the manufacturing:
Direct materials $9,576
Direct labor $12,882
Variable overhead $14,364
Total $36,882
Their new cost is ($2.85 X 11,400) $32,490
$36,882 - $32,490 = $4,392
If Sunland accepts the offer the net income increase (decrease) by $4,392
 
        
             
        
        
        
Answer:
Bob Katz and Sally Mander
Taxable Income for 2018:
= $78,200
Explanation:
a) Data and Calculations:
Total wages =                  $102,400
Gain from sale of stock =     5,200
Interest income =                      100
Total income =                 $107,700
less total deductions =     (29,500)
Taxable Income =            $78,200
b) Bob Katz and Sally Mander will have taxable income of $78,200 when the appropriate rate of tax is applied and the tax liability obtained, then the $1,500 tax credit will be deducted before arriving at the tax liability due.  
c) The short-term capital gain of $5,200 is taxed as ordinary income.  Since it is held for less than a year, it will be included in the taxable income for that year and it follows the same tax brackets as ordinary income.  On the other hand, the long-term capital gain of  $13,000 will attract a tax rate of 0 percent for a taxable income of $78,200.  Otherwise, it will attract a tax rate of 15 percent or 20 percent, depending on income level. This means that long-term capital gains tax rates are much lower than the ordinary income tax rate.
 
        
             
        
        
        
Answer:
d. $2(1.10)/[0.15-0.10]
Explanation:
The formula to compute the today value of the stock by using the Gordon model is shown below:
= Next year dividend ÷ (Required rate of return - growth rate)
where, 
Next year dividend is 
= $2 + $2 × 10%
= $2 + 0.2
= $2.2
And, the required rate of return is 15%
Plus the growth rate of return is 10%
So, the today value of the stock is 
= $2.2 ÷ (15% - 10%
= $44
 
        
             
        
        
        
Answer:
Adjusting entry the company made to record its estimated bad debts expense:
Bad Debts Expense 29,300
Allowance for Doubtful Accounts 29,300
Explanation:
The company uses the aging of receivable method to estimate uncollectible.
Estimated uncollectible would be $28,500
Before year-end adjustments, the Allowance for Doubtful Accounts had a debit balance of $800
Bad debts expense = $28,500 + $800 = $29,300
 Adjusting entry the company made to record its estimated bad debts expense:
Bad Debts Expense 29,300
Allowance for Doubtful Accounts 29,300
 
        
             
        
        
        
Answer:
a. $425,000
Explanation:
<em>Calculation of compensated absences expense for the year</em>
Closing balance of compensated absences        = $150,000
+ Payments made for compensated expenses   =   $400,000
- Opening balance of compensated absences    =<u> - $125,000</u>
Compensated absences expense for the year =     $425,000