Answer:
a. $295 million
Explanation:
Effective tax rate = GAAP tax / GAAP Pretax profift = 77 / 383 = 0.2010, or 20.10%.
Therefore, 2019 non-GAAP net income can be estimated as follows:
<u>Details $ in millions</u>
GAAP Pretax Profit 383
Stock-based compensation expense (12)
Restructuring expenses (7)
Gain on sale <u> 5 </u>
Non GAAP Pretax Profit 369
Taxes (20.10% * 369) <u> (74) </u>
Non-GAAP net income <u> 295 </u>
Answer and Explanation:
The correct journal entry to record the impact of this tax rate change is shown Below:
Income Tax Expense $5,000
To Deferred Tax Assets $5,000
(being the income tax expense is recorded)
here the income tax expense is debited as it increased the expense and credited the deferred tax assets
So, the same should be considered
Answer:
The key reason a top level executive would want to open yet another location especially in a place like china where labor and materials is cheaper is <u>minimizing risk of loss.</u>
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Explanation:
Diversification strategies are used to expand firms’ operations by adding markets, products, services, or stages of production to the existing business.
In this case, the top level executive is giving emphasis to lower cost of production at the new location as a reason to expand it operations there and also diversify.
Minimizing risk of loss is his primary motivation because over time, when the already established companies currently running at a deficit which could be in line with the business model, begin to record profit, some might still lag behind but not all of them at once.
If one location performs poorly over a certain period, others may perform better over that same period, reducing the potential losses from concentrating resources capital under fewer locations.
Answer:
Letter a is correct. Distort incentives and this distortion causes markets to allocate resources inefficiently.
Explanation:
What happens is that when rates rise, it causes an imbalance in supply and demand, because at higher rates companies are forced to raise prices to offset tax costs, so the pass-through of consumer prices discourages consumption and as a consequence of less consumption, production also decreases, causing the inefficient allocation of market resources.