Answer:
$800
Explanation:
The computation of the tax saving from using LIFO is shown below:
= Cost of goods sold under LIFO × tax rate - Cost of goods sold under FIFO × tax rate
= $10,000 × 40% - $8,000 × 40%
= $4,000 - $3,200
= $800
By applying the above formula, the tax saving resulted from using the LIFO is $800 and the same is to be considered
Answer:
The retained earnings statement showed a closing retained earnings of $226,120.00 as at 2017 year end.
Explanation:
In arriving at the closing retained earnings , I treated prior items retrospectively- that is as if the impact of such items have been in the accounts from day one,less the tax effect of all items involved.
For instance ,I deducted the understatement of depreciation in 2015 less of tax impact of 40%
Kindly find attached for details.
Answer: $82,500
Explanation:
Saleh's salary for fiscal year ending September 30 = $330,000
Salary that should be paid between October 1 - December 31, if the corporation is to continue to use it's fiscal year without negative tax effect.
To avoid negative tax effect, the Saleh's salary should be atleast equal to the amount being given for the fiscal year which ended in September 30.
October 1 - December 31 = 3 months
Saleh's monthly salary = total slary during fiscal year ÷ 12
$330,000 ÷ 12 = $27,500
October 1 - December 31 = $27500 * 3 = $82,500
False they can transfer credits
