Answer:
The answer is: Stone can report $8,750 as deferred income tax liability
Explanation:
Deferred income tax liability: income tax owed by a business that is put off into future years because a difference exists between GAAP accounting (in this case book depreciation) and income tax accounting.
The deferred tax liability is based on the difference on depreciation. Since 20x9 is Stone Co.'s first year of operations, the depreciation difference in this year must equal the net future depreciation difference.
To calculate the deferred tax liability balance we take the difference in depreciation and multiply it by the future tax rate: $25,000 x 35% = $8,750.
Answer:
Instructions are listed below.
Explanation:
Giving the following information:
A machine costing $251,800 was purchased May 1. The machine should be obsolete after three years and, therefore, no longer useful to the company. The estimated salvage value is $3,400.
A) Straight-line:
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= (251,800 - 3,400)/3= $82,800
B) Double declining balance:
Annual depreciation= 2*[(original cost - residual value)/estimated life (years)]
Year 1= (248,400/3)*2= 165,600
Year 2= 55,200
Year 3= 18,400
Answer:
The answer is 17.67 years.
Explanation:
Present value is $2,500
Future value of the money to be double of the present value. This means the future value will be $5,000($2,500 x 2)
Interest rate is 4%
Number of years or periods to reach this $5,000 is unknown. So we are looking for this.
To compute this number of periods, lets use Financial calculator.
I/Y = 4; PV= -2,500; FV= 5,000; CPT N= 17.67 years.
Therefore, the number of years to accumulate to $5,000 is 17.67 years
The two primary factors affecting an entrepreneur choice of legal ownership for a venture are TAXES AND LEGAL LIABILITY.
The type of business that an entrepreneur establish will determine the type and the amount of tax that it will be required to pay. The legal liability of the entrepreneur determines the extent to which he can be liable in case he finds himself in a financial mess. The entrepreneur should try and minimize the impacts of these two factors.
Answer:
Business plan necessary because:
•It make you aware of your strength or weakness.
•It also creates an effective strategy for growth.
•It helps to determine your future financial needs.
•It also helps to gain a deep understanding of your market.
