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lesya692 [45]
3 years ago
6

The accountant at Metlock, Inc. is figuring out the difference in income taxes the company will pay depending on the choice of e

ither FIFO or LIFO as an inventory costing method. The tax rate is 30% and the FIFO method will result in income before taxes of $15730. The LIFO method will result in income before taxes of $14600. What is the difference in tax that would be paid between the two methods?
Business
1 answer:
Lisa [10]3 years ago
6 0

Answer:

$339

Explanation:

Computation of the given data are as follows:

Income before tax in FIFO = $15,730

Tax rate = 30%

So, the Tax amount for FIFO = $15,730 × 30%

= $4,719

And, Income before tax in LIFO = $14,600

Tax rate = 30%

So, the Tax amount for LIFO = $14,600 × 30%

= $4,380

So, the difference in tax amount = Tax amount for FIFO  - Tax amount for LIFO

= $4,719 - $4,380

= $339

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Portia Grant is an employee who is paid monthly. For the month of January of the current year, she earned a total of 8,638. The
mina [271]

Answer:

Net Pay = Gross Pay - Federal Income Tax - FICA-SS Tax - FICA-Medicare Tax

Net Pay = $8,260.00 - $1,325.17- $512.12 - $119.77* = $6,302.94

Explanation:

4 0
3 years ago
Should Tangshan Mining company accept a new project if its maximum payback is 3.5 years and its initial after tax cost is​ $5,00
Firlakuza [10]

Answer:

Yes, Tangshan Mining company should accept the project.

Explanation:

Payback period is the number of years it takes for a project's expected cash inflows to recover the initial investment amount.

Tangshan company's required payback period = 3.5 years

<u>Year             CF                       Net CF</u>

0             -5,000,000        -5,000,000

1               1,800,000          -3,200,000

2              1,900,000          -1,300,000

3                700,000           -600,000

4               1,800,000            1,200,000

<em>Payback period = last year with -net CF +(absolute net CF that year /total CF the following year)</em>

Payback period = 3 + (600,000 / 1,800,000)

=3 + 0.33

= 3.33 years

Since 3.33 years is lower than the required payback period of 3.5 years, Tangshan Mining company should ACCEPT the new project; it will take less years to fully recover the initial amount investment.

5 0
2 years ago
A parent sold land costing $400,000 to its subsidiary for $450,000 in 2017. The subsidiary still holds the land at the end of 20
nadezda [96]

Answer:

correct option is a. Land

Explanation:

given data          

land costing =  $400,000        

subsidiary 2017 = $450,000      

land credit = $50,000        

                 

solution            

While when we consolidating  land that will  appear in the group asset at the amount of 450,000.  

so here the appreciation in the value of land is not  realized gain .

so that there will be  credit to land with 50,000

so correct option is a. Land

5 0
2 years ago
Assume the following information from a schedule of cost of goods manufactured:
Evgesh-ka [11]

Answer:

The manufacturing overhead applied to work in process is:

D. $79,000

Explanation:

a) Data and Calculations:

Beginning work in process inventory          30,000

Direct materials used in production            50,000

Direct labor                                                   60,000

Total manufacturing costs to account for 219,000

Manufacturing overhead applied to WIP   79,000 (219,000 - 140,000)

Ending work in process inventory              72,000

b) The manufacturing overhead applied to Work in Process is the difference between the total manufacturing costs to account for and the costs of beginning work in process, direct materials, and direct labor for the period.  When the ending work in process is deducted from the total manufacturing costs, the resulting figure represents the cost of goods transferred to finished goods inventory.

3 0
2 years ago
Nancy sold three capital assets that were held for investment. She sold stock in ABC Corporation for a gain of $10,000; stock in
wlad13 [49]

Answer:

D) $3,000 deduction against ordinary income with a $5,000 capital loss carried forward to offset income for next year

Explanation:

Note: This question is not complete as it does not include the options. The complete question is therefore presented before answering the questions follows:

Nancy sold three capital assets that were held for investment. She sold stock in ABC Corporation for a gain of $10,000; stock in XYZ Corporation for a gain of $2,000; and corporate bonds for a loss of $20,000. Assuming all of the investments had a long-term holding period, how will the transactions be treated for tax purposes?

A) Gain of $12,000 taxed at 15% and a loss of $20,000 deductible against ordinary income

B) Net loss of $8,000 that is fully deductible against ordinary income in the current year

C) Net loss of $8,000 that results in no deduction in the current year, but can be carried forward to offset capital gains for the next year

D) $3,000 deduction against ordinary income with a $5,000 capital loss carried forward to offset income for next year

The explanation to the answer is therefore presented as follows:

The first step is to compute the net capital gain (loss) is as follows:

Particulars                                                                            $  

Gain from the sale of stock in ABC Corporation          10,000

Gain from the sale of stock in XYZ Corporation            2,000

Loss from the sale of corporate bonds                     <u>  (20,000)  </u>

Net capital gain (loss)                                              <u>     (8,000)  </u>

In the US, individuals are allowed to use up to $3,000 to reduce their taxable income in the first year of the loss, while the remaining capital losses will be carried over to the next years.

From the net capital gain computed above, the correct option is D. That is, the $8,000 loss will be treated for tax purposes as a $3,000 deduction against ordinary income in the current year with the remaining $5,000 capital loss carried forward to offset income for next year.

6 0
3 years ago
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