1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Nuetrik [128]
3 years ago
14

Cass Corporation reported pretax book income of $10,600,000. During the current year, the reserve for bad debts increased by $17

2,500. In addition, tax depreciation exceeded book depreciation by $227,500. Cass Corporation sold a fixed asset and reported book gain of $87,000 and tax gain of $114,500. Finally, the company received $270,000 of tax-exempt life insurance proceeds from the death of one of its officers. Compute the company’s current income tax expense or benefit.
Business
1 answer:
s344n2d4d5 [400]3 years ago
7 0

Answer:

Tax Income Expense   10,600,000

Tax income payable                 10,302,500

deffered tax liability                       297,500

Explanation:

pretax book income                 10,600,000

reverse bad debt                            172,500

additional dep                               -227,500

book asset sale gain                       -87,000

taxable asset sale gain                    114,500

tax expemt insurance proceed    -270,000

Taxable income                         10,302,500

You might be interested in
Assuming that the standard fixed overhead rate is based on full capacity, the cost of available but unused productive capacity i
ioda

Answer: a.fixed factory overhead volume variance.

Explanation:

Fixed overhead costs are the costs that are incurred by an organization that doesn't change even when the lre is a change in the volume of production activity. The fixed overhead costs are vital in order for the effective operation of the company.

When the standard fixed overhead rate is based on full capacity, the cost of available but unused productive capacity is indicated by the a.fixed factory overhead volume variance.

8 0
3 years ago
You have been recently hired as an assistant controller for XYZ Industries, a large, publically held manufacturing company. Your
soldi70 [24.7K]

Answer:

XYZ

a. The Effect on Income Before Taxes of the Change of Ageing Analysis:

The Income before Taxes would be $45,000 ($180,000 - $20,000) -   ($135,000 - 20,000) more than the income that should have been reported.  Assuming the Income Taxes were to be based on the increased income figure, XYZ would have an increased tax liability by say $18,000 (45,000 x 40%).  This reduces the Retained Earnings (or Stockholders Equity) by $18,000.  The company would in actual fact, be reporting a net income of $27,000 more than it should have reported.  This is very deceptive for all those who would be using the reported financial statement in making their decisions.  Unfortunately, we would have showed the affected customer that we are dubious in our business practise, further jeopardizing the chance of full recovery of the debt.  This is apart from taking into consideration the type of customer that would be ready to accept a revised invoice that was formerly past due.

b.  The ethical dilemma is doing the right thing according to Rights Theory.  We cannot say we have adhered to a set of rules (the U.S GAAP or the IFRS) when in fact we are violating an important rule of fair presentation of the elements of the financial statement.

I would try to convince the controller to rescind his suggestion and follow the rules.  We understand that making allowance for uncollectibles is an estimate based on judgement.  However, since we have established the basis and even stated it in the notes to the financial statements, I think that we should follow through.

Explanation:

The year's Uncollectible Expense should be $160,000 ($180,000 - $20,000).  If the allowance for the year were to be adjusted from $180,000 to $135,000, it means that the Uncollectible Expense would then be $115,000 ($135,000 - $20,000).  We will be under-reporting the Uncollectible Expense by a difference of $45,000 ($160,000 - $115,000), thereby boosting the net income before tax by $45,000.

4 0
3 years ago
Lion Company's direct labor costs for the month of January were as follows: What was Lion's direct labor efficiency variance? Se
lakkis [162]

Answer:

Direct labor time (efficiency) variance= $6,150 favorable

Explanation:

Giving the following information:

Lion Company's direct labor costs for the month of January were as follows:

Actual total direct labor-hours 20,000

Standard total direct labor-hours 21,000

Direct labor rate variance - unfavorable $3,000

Total direct labor cost $126,000

First, we need to calculate the standard direct labor hour cost.

Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity

Actual rate= 126,000/20,000= 6.3

-3,000= (SR - 6.3)*20,000

-3,000= SR20,000 - 126,000

123,000/20,000= SR

6.15= Standard rate

To calculate the direct labor efficiency variance, we need to use the following formula:

Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate

Direct labor time (efficiency) variance= (21,000 - 20,000)*6.15

Direct labor time (efficiency) variance= $6,150 favorable

7 0
3 years ago
Why is it important to consider the apr when comparing credit card offers?
Elena-2011 [213]

Answer:

because it can give you a good idea of how much you'll pay to take out a loan.

Explanation:

7 0
2 years ago
The amounts of the assets and liabilities of Journey Travel Agency at December 31, 2018, the end of the year, and its revenue an
Alexus [3.1K]

Answer:

                          Income statement

Fee earned                                               $383,500

Expenses:  

Miscellaneous expense        $14,500

Rent expense                         $22,500

Supplies expense                  $11,300

Utilities expense                    $16,700

Wages expense                     <u>$170,000</u>    <u>$235,000</u>

Net income                                                <u>$148,500</u>

                     Statement of retained earnings

Retained earnings, beginning            $1,341,000

Net income                                          $148,500

Less: Dividend paid                       <u>$75,000</u>

Retained earnings, ending                  <u>$1,414,500</u>

                                 Balance sheet

Assets

Cash                                                        $190,500

Accounts receivable                              $236,500

Supplies                                                  $7,000

Land                                                        $<u>1,500,000</u>

Total assets                                            $<u>1,934,000</u>

Liabilities

Accounts payable                                         $69,500

<u><em>Stockholders' equity</em></u>

Common stock                   $450,000

Retained earnings              $<u>1,414,500</u>

Total stockholders' equity                           $<u>1,864,500</u>

Total liabilities and stockholders' equity  <u>$1,934,000</u>

3 0
3 years ago
Other questions:
  • Feeney Furniture prepared the following sales budget: Month Cash Sales Credit Sales March $19,000​ $11,000​ April $40,000​ $11,0
    7·2 answers
  • A machine with a cost of $164,000, accumulated depreciation of $102,000, and current year depreciation expense of $25,500 is sol
    10·1 answer
  • Donald Gilmore has $100,000 invested in a 2-stock portfolio. $72,500 is invested in Stock X and the remainder is invested in Sto
    15·1 answer
  • Henry Ford famously mass-produced cars at the beginning of the twentieth century, starting Ford Motor Company. He made millions
    6·1 answer
  • Which of the following is NOT a creative thinking exercise entrepreneurs use to generate ideas?
    10·1 answer
  • Suppose that Greece and Switzerland both produce beer and olives. Greece's opportunity cost of producing a crate of olives is 5
    9·1 answer
  • Margot has fallen in love with a three-bedroom, 2,500-square-foot property in her friend’s neighborhood. It’s listed for $400,00
    10·1 answer
  • Mountain High Ice Cream Company transferred $68,000 of accounts receivable to the Prudential Bank. The transfer was made without
    10·1 answer
  • A bank will not require security in the form of collateral as a guarantee the loan will be repaid.
    10·2 answers
  • Choose the letter of the item that best completes the statement or answers the question. Last year Jackson earned $500,000, Vele
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!