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Rainbow [258]
2 years ago
13

Assume that Tom and Mason are in the 24% marginal tax bracket and the actual before-tax cost for Tom to drive to and from work i

s $0.30 per mile. What are Tom's and Mason's after-tax costs of commuting to and from work
Business
1 answer:
kicyunya [14]2 years ago
5 0

The question incomplete! The complete question along with answer and explanation is provided below.

Question:

Eagle Life Insurance Company pays its employees $.30 per mile for driving their personal automobiles to and from work. The company reimburses each employee who rides the bus $100 a month for the cost of a pass. Tom, in his Mazda 2-seat Roadster, collected $100 for his automobile mileage, and Mason received $100 as reimbursement for the cost of a bus pass.

a. What are the effects of the $100 reimbursement on Tom's and Mason's gross income?

b. Assume that Tom and Mason are in the 24% marginal tax bracket and the actual before-tax cost for Tom to drive to and from work is $0.30 per mile. What are Tom's and Mason's after-tax costs of commuting to and from work?

Explanation:

a.

For Tom:

He is required to include the $100 in gross income therefore, he would have to pay after-tax cost on the reimbursement.

For Mason:

He is not required to include the $100 in gross income due to qualified transportation fringe.

b.

For Tom:

Marginal tax = 24%

The after-tax cost of commuting = 0.24*$100 = $24

The before-tax cost of commuting = $0 (since he was reimbursed)

For Mason:

The after-tax cost of commuting = $0

The before-tax cost of commuting = $0 (since he was reimbursed)

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Free Spirit Industries Inc.’s current ratio is 1.3333, and tis quick ratio is 0.7467; Jong Foodstuffs Inc.’s current ratio is 1.
ivolga24 [154]

Answer:

1. Jong Foodstuffs Inc. has a better ability to meet its short-term liabilities that Free Spirit. - TRUE

2. A current ratio of 1 indicates that the book value of the company’s current assets is equal to the book value of its current liabilities. - TRUE

3. If a company has a quick ratio of less than 1 but a current ratio of more than 1 and if the difference between the two ratios is large, then the company depends heavily on the sale of its inventory to meet its short-term obligations. - TRUE

4. Compared to Free Spirit, Jong Foodstuffs has less liquidity and a lower reliance on outside cash flow to finance its short-term obligations. FALSE

5. An increase in the current ratio over time always means that the company’s liquidity position is improving. FALSE

Explanation:

Current Ratio = Current Asset / Current Liabilities

Quick Ratio = (Current Assets – Inventories) / Current Liabilities

The Current Ratio is a liquidity measure that shows the ratio between current asset and current liabilities. It tells how many dollars of the current asset are per dollar of current debts, that gives an idea of the company`s ability to perform its debts.    

The Quick Ratio is also a liquidity indicator, but using its most liquid assets, to pay its current liabilities at maturity. The inventory, although it is a current asset, is not considered, since it cannot be converted into cash in a very short term.

The difference between the Quick Ratio and the Current Ratio, implies that while both are measures of the company's ability to pay its debts, the quick ratio also tells how much the company depends on its inventory to get that objective.

As both ratios are bigger in Jong Foodstuffs Inc.’s case, statement 1 is True and statement 4 is False. Because how ratios are calculated, and the meaning of its terms, statement 2 and 3 are True. And because an increased in current ratio, may implicate a rise in inventory, and therefore a decreased in quick ratio, statement 4 is False.  

5 0
3 years ago
Which of the following is not possible when recording a transaction?A. Liabilities increase and assets decrease.B. Stockholders'
Basile [38]

Answer:

Liabilities increase and assets decrease.

Hope this helps!

3 0
3 years ago
Let’s say you’re looking to increase the visibility of your company blog. What, in addition to SEO tactics, could you do to make
zhuklara [117]

Answer:

Addition of backlinks to your Blog

Explanation:

Addition of backlinks to your blog post is one way you can make it easy for people to organically find your previous published pages

Backlinks are links created and added to a webpage that links the website or webpage to another webpage or blog post. this links makes it easier for people navigating through a company's blog to find previously posted articles without having to search them all over again on the menu page.

3 0
3 years ago
In an open economy, gross domestic product equals $2,450 billion, consumption expenditure equals $1,390 billion, government expe
N76 [4]

Answer:

$735 billion

Explanation:

Calculation to determine the national saving

Using this formula

National saving =Gross domestic product-Consumption expenditure-Government expenditure

Let plug in the formula

National saving=$2,450 billion-$1,390 billion- $325 billion

National saving=$735 billion

Therefore the national saving is $735 billion

7 0
3 years ago
Zirconia Fantasy sells only necklaces. 8 comma 000 units were sold resulting in $ 240 comma 000 of sales​ revenue, $ 60 comma 00
Naya [18.7K]

Answer:

$66,667

Explanation:

Contribution margin = Sales Revenue - Variable cost = 240000-60000 = 180000

Percentage of contribution margin = Contribution margin / sales revenue = 180000 / 240000 = 75%

Breakevent point in total sales = Fixed costs / Percentage of contribution margin

= 50000/0.75 = $66,667

3 0
3 years ago
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