<span>Family A: marginal rate 20%, average rate 10%</span><span>
Family B: marginal rate 40%, average rate 23% </span><span>
The marginal tax rate is the rate paid on the last dollar of income; this would be whatever tax bracket the family is in. The average price is the total tax divided by the total revenue. </span><span>
Family A: </span><span>
</span><span>
total income $40,000: this includes $10,000 at 0%, $20,000 at 10% (tax of $2,000), and $10,000 at 20% (tax of $2,000). The last rate paid is 20% so that is the marginal rate; the total tax paid is $4,000, divide that by $40,000 total income, that is the average rate. </span><span>
Family B: </span><span>
</span><span>
total income $100,000: this includes $10,000 at 0%, $20,000 at 10% (tax of $2,000), $20,000 at 20% (tax of $4,000), $30,000 at 30% (tax of $9,000), and $20,000 at 40% (tax of $8,000). The last rate paid is 40% so that is the marginal rate; the total tax paid is $23,000, divide that by $100,000 total income, that is the average rate.</span>
Answer: $230,500
Explanation:
Goodwill is the amount over the value of a company that is purchased for.
Fair market value is the relevant value used in goodwill calculation because it represents the current value of the assets acquired.
Goodwill = Acquisition price - Fair market values of the assets
= 511,000 - 35,000 - 183,000 - 46,500 - 16,000
= $230,500
Answer: $1000
Explanation:
First, we calculate the amount if bad debt expense which will be:
= 3% × $50000
= $1500
Therefore, the balance of accounts receivable at the end of the first year will be:
= Amount of bad debts expense - Account written off
= $1500 - $500
= $1000
Answer:
d. Applying a blanket gross profit rate to merchandise that have wide varying rates of gross profit
Explanation:
To know what problem could arise fro mthis method, we must understand the method:
ending inventory = cost available for sales - sales x (1- gross profit)
being cost available for sales = beginning invnetory + purchases
a) if a portion of inventory is destroyed, then we subtract it from the cost available for sales and we should be okay.
b) the amount of purchase is being considered so it will not produce a distorsion
c) then beginning invnetory equals to zero in the formula of cost availalbe and we are also okay
d) here is the problem, if there is a wide array of gross profit we could do an average but it will lead to distorsion if the sales are not in the expected weight.
