You must pay two types of taxes on earned income: Social Security/Medicare taxes (called FICA, OASDI, or payroll taxes) and income taxes. The payroll taxes that are withheld from your paycheck have two components.
Answer:
See explanation
Explanation:
(a) Assets are understated - If we do not adjust accrued revenue, the assets are understated. For example - if we do not add any outstanding rent revenue, the assets will become understated.
(b) Liabilities are overstated - If we do not adjust unearned revenue, the liabilities are overstated. For example - if we do not deduct any expired unearned revenue, the liabilities will become overstated.
(c) Liabilities are understated - If we do not adjust accrued expense, the liabilities are understated. For example - if we do not add any outstanding rent expense, the liabilities will become understated.
(d) Expenses are understated - If we do not adjust accrued expense and prepaid expense, the expenses are understated. For example - if we do not add any outstanding rent expense and expired prepaid expenses, the expenses will become understated.
(e) Assets are overstated - If we do not adjust prepaid expense, the assets are overstated. For example - if we do not deduct any expired prepaid insurance, the assets will become overstated.
(f) Revenue is understated - If we do not adjust accrued revenue and unearned revenue, the revenue is understated. For example - if we do not add any outstanding rent revenue and expired unearned revenue, the revenue will become understated.
Answer:
A. Reject (Alternative 1) $0.00
Accept (Alternative 2) $1.12
Differentials Effect on income (Alternative 2) $1.12
B. Accepted (Alternative 2)
Explanation:
a. Preparation of a differential analysis dated March 16 on whether to reject (Alternative 1) or accept (Alternative 2) the special order.
DIFFERENTIAL ANALYSIS
Reject (Alternative 1) or Accept (Alternative 2)
March 16
Reject Accept Differentials Effect on income
(Alternative 1) (Alternative 2) (Alternative 2)
Revenue per unit $0.00 $7.20 $7.20
Costs:
Variable manufacturing costs per unit
$0.00 -$5.00 -$5.00
Export tariff per unit
$0.00 -$1.08 -$1.08
($7.20*15%=$1.08)
Income (Loss) per unit $0.00 $1.12 $1.12
b. Based on the above differential analysis
the special order should be ACCEPTED (Alternative 2).
Answer:
3.5%
Explanation:
We will apply asset pricing model to calculate cost of equity (required rate of return). The capital asset pricing model is stated as below:
Cost of equity = Risk-free rate + Beta x Market risk premium
Putting all the number together, we have:
Cost of equity (Beale) = 5.5% + 1.8 x (9% - 5.5%) = 11.8%
Cost of equity (Foley) = 5.5% + 0.8 x (9% - 5.5%) = 8.3%
Cost of equity (Beale) - Cost of equity (Foley) = 11.8% - 8.3% = 3.5%
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<em>Note: You can also do quick calculation as below:</em>
<em>Cost of equity (Beale) - Cost of equity (Foley) = (Beta of Beale - Bete of Foley) x Market risk premium = (1.8 - 0.8) x (9% - 5.5%) = 3.5%</em>
Answer:
Land 594,500
Explanation:
We must include all cost necessary to acquire the land and lelave it ready to use.
But, the demolition cost are associate with the old warehouse thus, as thsis asset is being destroyed It will be considered period cost, It will not be capitalized through land.
Acquisition cost 550,000
broker commission 35,000
title insurance 2,500
closing cost <u> 7,000 </u>
Total cost 594,500
