Jeff works as a computer repair technician
2 answers:
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Solution :
<u>Item </u> <u>Amount</u>
Income $113,000
Personal exemption for one $ 4,050
Standard deduction $ 6,350
Taxable income $102,600
Therefore the taxable income is $102,600.
Now the tax payable on the taxable income is given by :
<u>Marginal tax rate </u> <u> Amount brackets</u>
10% $0 - $ 9,325
15% $ 9,326 - $ 37,950
25% $ 37,951 -$ 91,900
28% $ 91,901 - $ 191,650
Now according to the above taxable slab, the amount of tax on the wages earned by Jenna is :
Tax payable =
= 932.5 + 4293.75 + 13487.50 + 2996
= $ 21,709.75
There is also a long term capital gain of $ 5,200 that is earned by selling the common stock.
Now as per IRS, the capital gain of a long term tax percentage for an individual single filer is in 28% tax slab category is 15%.
Therefore the tax on the capital gain of $ 5,200 is = 0.15 x 5200
= $780
Thus the total tax payable by Jenna is = $ 21,709.75 + $ 780
= $ 22,489.75
Answer:
Answer is explained in the explanation section below.
Explanation:
Note: This question is incomplete and lacks necessary data to solve for this question. However I have found similar question on the internet and I will be using that data. Besides, I have attached the data used in the attachment below.
Solution:
1. The debt-to-equity ratio is the best way to assess financial risk. A higher debt-to-equity ratio indicates a higher level of financial risk. This ratio represents the willingness of the equity of the owners to fulfil their obligations.
Formula used:
Debt-to-equity ratio = Total liabilities divided by owner's equity
For Clobes:
Total liabilities = 100,000
Owners' equity = 200,000
Debt-to-equity ratio = 100000/200000 = 0.5
For Snyder:
Total liabilities = 300,000
Owners' equity = 200,000
Debt-to-equity ratio = 300000/200000 = 1.5
For Welz:
Total liabilities = 300,000
Owners' equity = 100,000
Debt-to-equity ratio = 300000/100000 = 3
Welz faces the greatest financial risk because it has the highest debt-to-equity ratio. It has a debt-to-equity ratio of three. Even though it depends on the industry, a company's debt-to-equity ratio should be between 1 and 1.5 if it is considered optimal. In this case, Welz's financial risk is considerably higher.
2. calculate Return on Equity(ROE)
Formula used:
ROE = Net income / Owner's equity
For Clobes:
Net income = 25,000
Owners' equity = 200,000
ROE = 25,000 / 200000 = 0.125
For Snyder:
Net income = 30,000
Owners' equity = 200,000
ROE = 30000 / 200000 = 0.15
For Welz:
Net income = 20,000
Owners' equity = 200,000
ROE = 20000 / 100000 = 0.2
Welz has the highest return of equity (ROE) of 0.2.
As a result, Welz is the most profitable company.
3. Return on assets:
Formula used
Return on Assets = Net income / Total assets
For Clobes:
Net income = 25,000
Total assets = 300,000
Return on Assets = 25,000 / 300000 = 0.08
For Snyder:
Net income = 30,000
Total assets = 500000
Return on Assets = 30000 / 500000 = 0.06
For Welz:
Net income = 20,000
Total assets = 400,000
Return on Assets = 20000 / 400000 = 0.05
Hence,
Clobes has the highest return on assets, which is 0.08.
