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Irina-Kira [14]
3 years ago
6

In year 1, Firm A paid $50,000 cash to purchase a tangible business asset. In year 1 and year 2, it deducted $3,140 and $7,200 d

epreciation with respect to the asset. Firm A’s marginal tax rate in both years was 21 percent. Now assume that Firm A borrowed $50,000 to purchase the asset. In each year, it paid $3,800 annual interest on the debt. The interest payments were deductible.
Business
1 answer:
Tatiana [17]3 years ago
8 0

<u>Solution and Explanation:</u>

a.<u>Compute Firm A’s net cash flow attributable to the asset purchase in each year.Year 2011: </u>

Cost of Asset  = ($50,000)

Tax Savings (Annual Depreciation x Tax Rate) (\$ 3,140 \times 35 \%)  = $1,099

Net Cash Flow  = ($48,901)

Year 2012:

Cost of Asset   = N/A

Tax Savings (Annual Depreciation x Tax Rate) (\$ 7,200 \times 35 \%)  = $2,520

Net Cash Flow = $2,520

b. <u>Compute Firm A’s adjusted basis in the asset at the end of each year. </u>

INITIAL COST OF ASSET = $50000

DEPRECIATION YEAR 1 = (3140)

ADJUSTED BASIS AT END OF YEAR 1 = $46860

YEAR 2 DEPRECIATION = (7200)

ADJUSTED BASIS AT END OF YEAR 2 = $39660

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Has anyone done the managing payroll quiz for Personal Finance on connexus???
trasher [3.6K]

Answer:

a) withholdings

b) deductions

c) payroll register

d) methods of paying employees

e) commission

f) specific required deductions

g) hourly rate

h) voluntary deductions

i) Salary

j) standard deductions

Explanation:

A)

Withholdings are the amount that is associated with the payroll deductions from an employee's gross wages. The employer does not include withholdings in the employee's paycheck. Instead of adding it to the salary, the amount is transferred to the federal, state, or local government or tax authorities. It also decreases the tax that an employee has to pay during the yearly tax return.

B)

When an employer withholds any amount from an employee's gross salary, such as taxes, insurance, wage responsibilities, saving plans, and child support payments, it refers to deductions. The payroll deduction is also known as involuntary deductions because the employer is withholding the amount. Those deductions are legally deductible; therefore, it is automatic deductions.

C)

A list of periodic reports that enlist the hourly wages, additionals, gross pay, deductions, net pay, and the date of payrolls refers to the payroll register. More precisely, it is a summary of each employee's paycheck throughout a period. It starts with the current quarter's or month's total hourly wages and ends with the net pay of the employee.

D)

The commission is the percentage paid to an employee for his or her additional service provided for the company. For example, a company asks an employee to produce anything over 500 shirts per week will receive 10% additions, if the employee contributes in 510 shirts, he will receive an extra payment, it is commission. The hourly rate is the amount paid to the employee per hour. The salary is the monthly or weekly amount paid to an employee for his periodic contribution towards a business.

E)

The commission is the portion given to an employee for his or her supplementary service rendered for the company. For example, a manager of a firm urges the sales representative to sell $10,000 per month to receive an extra 10% of the total sales. If the sales representative sells $10,000 or more, he will receive an additional fee as a percentage. That percentage refers to the commission.

F)

Specific payroll deduction means deduction from paycheck to meet the obligations of income tax and other required duties. Every individual and corporation whose income is taxable is obliged to pay a tax. In the case of specific payroll deduction, an employee is legally obligated to withhold this money from an employee's payroll check based on federal and state laws. But specifically required deduction is not only used for tax provisions but also used for employee-related benefits like health insurance and short time disability plans that are offered by the employer.

G)

According to the Cambridge dictionary, hourly rate means the amount of money that is charged, paid, or earned for every hour worked. An employer is bound to pay a minimum hourly wage to the employee. It is one of the critical issues as many workers work as a part-time job. Since it is not a fixed job, so monthly or weekly payment is not applicable here. To adjust the amount for every type of employment, whether it is a permanent or temporary hourly rate of wage, is the best solution.

H)

When any deductions from employees salary or wages are not legally binded, those deductions are termed as Voluntary deductions. Voluntary deduction does not need any imposition of law. As it is not legally required, it is offered by the employer for employee's acceptance. This kind of deduction may include health, accident, disability, retirement plans; flexible spending accounts such as parking and transit costs; union dues; and deductions for paycheck advances and other company-sponsored benefits.

I)

Salary is most commonly known as compensations paid by the employer to an employee in return for required job performance. Salary generally paid in fixed intervals for an individual's performance. The intervals may be weekly, monthly, etc. and these are set up by a mutual contract between employer and employee. Salary mainly includes base pay and other benefits,  bonuses, or rises. Salary mainly gives security towards the employee as it is fixed payment for their work performances.

J)

Standard deduction means deduction of some amount of money from the total amount of income to reduce total taxable income. In short, it means a portion of income that is not subject to tax. The amount of one's standard deduction depends on one's filing status, age, or whether one is disabled or claimed as a dependent on someone else's tax return. But all the taxpayers are not qualified to enjoy this provision. Nonresident husbands and wives, married people filing separately whose spouses itemized, and trusts and estates cannot entertain this benefit.

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Define asset-backed security in your own words.​
Bezzdna [24]

Answer:

Asset-backed securities, also called ABS, are pools of loans that are packaged and sold to investors as securities

Explanation:

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3 years ago
When an individual withdraws funds from a checking account the: Select one: a. bank's balance sheet shrinks but the size of the
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Answer:

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So according to the given situation, the option c is correct

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What usually determines whether specialists in light steel or carpenters do the framing?
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I would say people who do light steel usually redu things and carpenters can build at structure from scratch. And light steel specialists usually just work with light steel as those who are carpenter specialists usually work with many products.

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3 years ago
A group of unrelated people are buying property together as co-owners. they'll likely either own it as tenants in common or ____
fiasKO [112]

The group of unrelated people who are buying property together as co-owners will likely either own it as tenants in common or <u>joint tenancy</u>.

<h3>What is a tenants in common?</h3>

This is when each tenant in common has the right to possess and enjoy the entire property and can go into possession of the whole unless another co-tenant objects.

<h3>What is a joint tenancy?</h3>

In the legal terms, it refers to the title property that exist when multiple individuals purchase it together with equal interest in and equal rights to the property.

Therefore, the group of unrelated people who are buying property together as co-owners will likely either own it as tenants in common or <u>joint tenancy</u>.

Read more about joint tenancy

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