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3 years ago

Computing Income Taxes

Business

1 answer:

Anastaziya [24]3 years ago

5 0

Answer:

The corporation's tax liability is $ 228,820.

Explanation:

To calculate tax liability we first have to find net profit. Detail calculation is given below.

Net profit Calculation

Sales $ 3,130,000

cost of goods sold and the operating expenses ($ 2,080,000)

Interest expense ( $ 377,000)

Net profit $ 673,000

Tax liability Calculation

Income fall under Tax bracket of 34% ($75,001 to $10,000,0000 for corporate tax. No additional surtax will be charged as income do not fall under its net.

Tax liabilty = 673,000 * 34% = $ 228,820

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When higher prices result in a lower quantity demanded, economists call this relationship: a. the law of quantity. b. the demand

Zanzabum

Answer:

d. the law of demand

Explanation:

One of the foundations of current economy, the inversely proportional relationship between prices and quantity demanded, that is, the higher the price the lower the demand, is known by economists as the law of demand.

This law is a key factor in the determination of prices of goods and services that we see each day and reflects the decrease in the marginal utility of each extra unit with an increase in price.

4 0

3 years ago

Tina's Track Supply's market-to-book ratio is currently 4.5 times and PE ratio is 10.5 times. If Tina's Track Supply's common st

otez555 [7]

Answer:

$22.2222, $9.5238, respectively

Explanation:

The market-to-book ratio is given by a share's market value divided by its book value, if shares are selling for $100 on the market, the book value is:

$B = \frac{\$100}{4.5}=\$22.2222$

The price to earnings ratio (PE ratio) is determined as a share's price divided by the earnings per share. Earnings per share are:

$E=\frac{\$100}{10.5}\\E=\$9.5238$

The book value per share and earnings per share are $22.2222, $9.5238, respectively

5 0

3 years ago

Variable Costing—Production Exceeds Sales Fixed manufacturing costs are $44 per unit, and variable manufacturing costs are $100

Soloha48 [4]

Answer:

a. The variable costing operating income is less than absorption costing operating income.

b. The difference in variable costing and absorption costing operating income is:

= $739,200.

Explanation:

a) Data and Calculations:

Fixed manufacturing costs per unit = $44

Variable manufacturing costs per unit = $100

Production units = 67,200

Sales units = 50,400

Ending inventory = 16,800

Income Statements Variable Absorption

Costing Costing

Costs of goods sold: $5,040,000 $7,257,600

Fixed expenses 2,956,800

Total costs $7,996,800 $7,257,600 $739,200

b) The difference in variable costing and absorption costing operating income is because of the absorbed fixed costs in ending inventory, which is now carried forward to the next accounting period.

4 0

3 years ago

Ginny Trueblood is considering an investment which will cost her $120,000. The investment produces no cash flows for the first y

velikii [3]

Answer:

The project should be rejected as the payback period of 3.97 years exceeds the required 3 years. So, the correct option is E

Explanation:

The table showing the discounted cash flows of each year:

Computing discounted payback as:

Discounted Payback = Number of years + (Initial Cost - Discounted Cash flow of year 1 + Discounted Cash flow of year 2 + Discounted Cash flow of year 3 / Discounted Cash flow of year 4)

= 3 + ($120,000 - $0 - $28,925.62 - $41,322.31 / $51,226.01)

= 3 + ($49,752.07 / $51,226.01)

= 3 + 0.97

= 3.97

Working Note:

Discounted Cash Flow is computed as:

Discounted cash flow = Cash Flow / (1 + r) ^ n

where

r is rate of return that is 10%

n is number of year

So,

For 1st year:

= $0 / (1 + 0.1) ^1

= $0

For 2nd year:

= $35,000 / (1 + 0.1) ^ 2

= $35,000 / 1.21

= $28,925.61

For 3rd year:

= $55,000 / (1 + 0.1) ^ 3

= $55,000 / 1.331

= $41,322.31

For 4th year:

= $75,000 / (1 + 0.1) ^ 4

= $75,000 / 1.4641

= $51,226.01

6 0

3 years ago

In the New Economy, people are most rewarded through education and intellectual growth when they spend years studying a broad ar

aliya0001 [1]

Answer:

False

Explanation:

The formal education setting has not been changing at the same rate with the daily changes in business, technology and other socio-economic elements.Therefore people who spend years studying a broad array of subjects in formal educational settings are less likely to be rewarded through education and intellectual growth.

7 0

3 years ago