1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Shkiper50 [21]
3 years ago
10

Warranty costs in the amount of $500,000 were recorded on the 2018 Income statement. However, the warranty tax deduction is not

allowed until payment occurs in future years.
Business
1 answer:
netineya [11]3 years ago
4 0

Answer:

Lets shape the question so it makes some sense.

<em>Warranty costs amounting $500,000 were recorded in 2018 Income statement. However, the warranty tax deduction is not allowed until payment occurs in future years. Disscuss accouting implication</em>

See detail answer below.

Explanation:

As per tax laws warranty provision is not allowed as deductible expense only warranty cost incured/paid during the year is allowed deduction when computing taxable income.

So the company shall recoginze defferd tax asset for this expense in current year. Following entries will be made by the company for financial accounting purpose.

Deffered Tax Asset Debit    $125000

Deffered Tax Income            $125000

(Assuming applicable tax rates is 25%)

The next year when the warranty claim will be incured/paid the company will reverse the above entry and can claim tax deduction against this waranty cost paid but not on provision basis.

You might be interested in
Consider a portfolio consisting of only Duke Energy and Microsoft. The percentage of your investment (portfolio weight) that you
Leokris [45]

Answer:

(2) 4%

Explanation:

The portfolio is considered to be less risky if its volatility is low. The higher standard deviation the more risky is the project. For Duke Energy and Microsoft the investment portfolio required is risk free investment. To calculate the risk free rate we calculate using the formula;

Var Rp = x1 2Var R1 + x2 2Var R2 +2 x1 x2 Corr (R1, R2) SD1 SD2

Var Rp = 0.14 + 0.44 + 2 (1) * (-1) * 6% * 24%

Solving for this we get the risk free investment at 4%.

3 0
3 years ago
Builders, inc., agrees to construct an office building for champ fitness clubs, inc. the project proceeds according to plan, but
adell [148]

Answer: option D is correct

Explanation:

Since the quit notice is not the builders fault, the termination of contract can filed on the bases of determination where the client client has to pay profit and losses incurred until the moment of termination.

7 0
3 years ago
As the use of the Internet grows around the world, there must be as easy an exchange of ideas and information as possible betwee
Nata [24]

c. societal culture and norms

Explanation:

  • The answer to the question can be understood from the following lines in the paragraph.
  • "Europeans believe it is unethical to invade someone’s privacy. Americans are not nearly as protective of their right to privacy."
  • The ethical factor illustrated by the example in the given paragraph is - Option c. societal culture and norms
7 0
3 years ago
the difference between the actual quanity and the standard quanity, multiplied by the standard price is the
dalvyx [7]

Answer: Direct materials quantity variance.

Explanation:

Direct Material quantity variance is the difference between the actual quantity of materials used in production and the standard quantity that was supposed to be used, multiplied by the standard price of the material.

It is a method that checks the company's efficiency is being able to use raw materials to produce goods. If the Actual quantity needed is greater than the Standard quantity, this will be considered an Unfavorable Variance and mean that the company was not efficient in using the materials.

Causes of this can be low quality of materials and inadequate employee training.

6 0
3 years ago
Mitch, a single tax-payer, earns $100,000 in taxable income and $10,000 in interest from an investment in city of Birmingham Bon
goldfiish [28.3K]

Answer:

E) None of the choices are correct.

<em>18.289,26‬</em>

<em>As we given an option with two decimals which are different from the calculated amount we should take it as incorrect. </em>

<em></em>

Explanation:

The municipal bonds are tax free. Therfore, not included.

We will calcuatae based on 2019 income tax brackets for single-taxers

between $82,501 to $157,500 the amount is $14,089.50 + 24% of the amount over 78,950

100,000 - 82,501 = 17,499

17,499 x 24% = 4,199.76

14,089.50 + 4,199.76 =<em> 18.289,26‬</em>

3 0
3 years ago
Other questions:
  • A fee is paid a. for each overdraft. c. monthly to have overdraft. b. for the first overdraft. d. annually to have overdraft.
    13·1 answer
  • During the recent financial crisis many workers lost their jobs. Amy, for example, lost her job as a pharmaceutical salesperson.
    13·1 answer
  • The crusades, fought on the basis of religion occurred in the continent of
    12·1 answer
  • In general, the better candidates for shortening are: Early tasks opposed to later tasks. Later tasks opposed to early tasks. Bu
    15·1 answer
  • Suppose the price of a ticket to a lenny kravitz concert is $41 and at that price, the quantity of tickets demanded is 17,000 pe
    12·1 answer
  • Hilton company reported net income of $30,000 for the year. During the year, accounts receivable increased by $7,000, accounts p
    10·1 answer
  • The unemployment rate in Economy X when it is growing normally is 5%. When Economy X is in a recession, the unemployment rate is
    13·1 answer
  • Which of the five Rs of good governance in sport refers to systems that report organizational governance structures, constitutio
    7·1 answer
  • Which of the following is not a business transaction? Question 6 options: Erin deposits $15,000 in a bank account in the name of
    12·1 answer
  • Winston Corp. had $1,800 of supplies on hand at January 1. During the year, supplies with a cost of $4,000 were purchased. At De
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!