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Sedaia [141]
3 years ago
8

Splish Inc. had pretax financial income of $139,400 in 2020. Included in the computation of that amount is insurance expense of

$4,400 which is not deductible for tax purposes. In addition, depreciation for tax purposes exceeds accounting depreciation by $10,000.
Prepare Shetland�s journal entry to record 2020 taxes, assuming a tax rate of 30%.
Business
1 answer:
RoseWind [281]3 years ago
6 0

Answer:

The Journal entry and their narrations is shown below:

Explanation:

The Journal entry is shown below:-

Income tax expenses Dr,         $43,140

        To income tax payable                    $40,140

         To Deferred tax liability                  $3,000

(Being Income tax expenses for the year is recorded)

Working Note 1:-

Income as per tax purpose

Pretax financial income                   $139,400

Add: permanent difference

Disallowed insurance expenses     $4,400

Less: Timing difference

Excess depreciation allowed            $10,000

Income as per tax purpose                 $133,800

Working Note 2

Income tax payable

= Income tax rate × Income as per tax purposes

= 30% × $133,800

= $40,140

Working Note 3

Deferred tax liability = Timing difference × Tax rate

= $10,000 × 30%

= $3,000

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Moorcroft Company’s budgeted sales and direct materials purchases are as follows:
Rama09 [41]

Answer:

a) Month        Sales

April           $300,000

May            $320,000

June           $370,000

Schedule of expected collections

For the month of June, 202x

Cash sales during June = $370,000 x 40% = $148,000

Collection from June's credit sales = $222,000 x 30% = $66,600

Collection from May's credit sales = $192,000 x 40% = $76,800

Collection from April's credit sales = $180,000 x 26% = $46,800

Total cash collections during June = $338,200

b) Month        DM purchases

April           $45,000

May            $54,000

June           $60,000

Schedule of expected cash payments for direct materials purchases

For the month of June, 202x

Cash purchases during June = $60,000 x 50% = $30,000

Cash payments for May's purchases = $27,000 x 40% = $10,800

Cash payments for April's purchases = $22,500 x 60% = $13,500

Total cash payments during June = $54,300

c) Month        Sales

April           $299,000

May            $337,000

June           $387,000

Schedule of expected collections

For the month of June, 202x

Cash sales during June = $370,000 x 40% = $148,000

Collection from June's credit sales = $222,000 x 30% = $66,600

Collection from May's credit sales = $192,000 x 50% = $96,000

Collection from April's credit sales = $180,000 x 18% = $32,400

Total cash collections during June = $343,000

It would be worth to pay the collector since the 2% reduction in uncollectible accounts is worth much more than the $1,000 that he/she earns.

d) Month        DM purchases

April           $45,000

May            $54,000

June           $60,000

Schedule of expected cash payments for direct materials purchases

For the month of June, 202x

Cash purchases during June = $60,000 x 40% = $24,000

Cash payments for May's purchases = $32,400 x 40% = $12,960

Cash payments for April's purchases = $27,000 x 60% = $16,200

Total cash payments during June = $53,160

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3 years ago
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Huh ??? This ain’t zoo
6 0
3 years ago
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Gourmet Aroma Coffee House has an exclusive contract with Columbia exporters. Two brands of gourmet coffee are imported, Morning
Marina86 [1]

Answer:

$24,160 favorable

Explanation:

The computation of the total contribution margin sales volume variance is given below:

The Budgeted contribution margin per pound of MT is

= $40 - $20

= $20 per pound

Now the budgeted contribution margin per pound of ET is

= $60 - $30

= $24  per pound

MT's contribution margin sales volume variance is

= (Actual sales quantity - Budgeted sales quantity) × Budgeted contribution margin per pound

= (3960 - 4000) × $20

= $800 Unfavorable

ET's contribution margin sales volume variance is

= (Actual sales quantity - Budgeted sales quantity) × Budgeted contribution margin per pound

= (5,040 - 4000) × $24

= $24,960 favorable

Now the total contribution margin sales volume is

= $800 unfavorable + $24,960 favorable

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Boyle Company makes fine jewelry that it sells to department stores throughout the United States. Boyle is trying to decide whic
Ksivusya [100]

Answer:

Explanation:

a)

Fixed Costs of Bracelet A

Advertising Costs   5,000$                                      

Annual depreciation 5,000$                                      

Total Fixed Costs   10,000$                

Fixed Costs for Bracelet B

Advertising Costs   3,000

Annual depreciation 4,000

Total Fixed Costs $ 7,000        

b)

Variable Costs for Bracelet A

Cost of Materials per unit $ 10                                            

Cost of labor per unit $ 15

Total Variable Costs per unit $25

Variable Costs for Bracelet B

Cost of Materials per unit $20

Cost of labor per unit $15

Total Variable Costs per unit $35                          

c) Avoidable costs

Avoidable Costs Bracelet A

Cost of Materials per unit $10

Cost of labor per unit $ 15

Avoidable Costs Bracelet B

Cost of Materials per unit $20

Cost of labor per unit $15

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