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andreyandreev [35.5K]
3 years ago
15

Bedford had this info at the end of 2015, its first year of operations: No other permanent or temporary differences exist. The l

itigation item will be paid in 2018. The depreciation will reverse evenly over the next three years. Tax rate is 30%. Future net income is probable. The 12/31/15 Income Tax Payable is:

Business
1 answer:
Alex73 [517]3 years ago
5 0

Answer: $150,000

Explanation:

Seeing as the litigation expense will only be paid in 2018, it should be added back to income for 2015.

= 900,000 + 100,000

= $1,000,000

As the depreciation will reverse evenly over the next three years and with future income probable, it should be removed from income.;

= 1,000,000 - 300,000

= $700,000

Municipal Bonds have the advantage of being Tax-exempt so their interest income should be removed to calculate how much tax should be paid.

= 700,000 - 200,000

= $500,000

2015 Income Tax Payable = 500,000 * 30%

= $150,000

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Meiji Isetan Corp. of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisio
disa [49]

Answer:

1. The ROI for Osaka and Yokahama is 24% and 16 % respectively

2. The residual income for Osaka and Yokahama is $245,000 and $280,000 respectively.

3. Yokohama is not better managed.

Explanation:

1. The formula to compute Return on Investment (ROI) is shown below:

= Net operating income ÷ Average operating assets

For Osaka

= $588,000 ÷ $2,450,000

= 24%

For Yokahama

= $2,240,000 ÷ $14,000,000

= 16%

Hence, The ROI for Osaka and Yokahama is 24% and 16 % respectively

2.  The computation of minimum required rate of return and residual income is shown below:

Minimum required rate of return = 14% of average operating assets

And, residual income = Net operating income - Minimum required rate of return

So,

For Osaka

The Minimum required rate of return = 14 % × $2,450,000 = $343,000

And, residual income = $588,000 - $343,000 = $245,000

For Yokohama

The Minimum required rate of return = 14 % × $14,000,000 = $1,960,000

And, residual income = $2,240,000 - $1,960,000 = $280,000

Hence, the residual income for Osaka and Yokahama is $245,000 and $280,000 respectively.

3. The greater amount of residual income doesn't mean that Yokohama is better managed. Here, the ROI and Net operating assets is to be considered for better managing.

So, Yokohama is not better managed.

3 0
3 years ago
Bill and Fred bake cookies and pies. Bill's opportunity cost of baking 1 pie is 5 cookies. Fred's opportunity cost of baking 1 p
Gennadij [26K]

Answer:

6 Cookies {or any >5, <7)

Explanation:

Theory of Comparative Advantage states : A person/ economy having lesser opportunity cost (i.e other good sacrifised) to attain a good, should sell it to - other person/ economy having the good's higher opportunity cost.

Trade is beneficial if the terms of trade exchange ratio is better than own account production sacrifise ratio.

Bill can bake a pie with opportunity cost of 5 cookies. Fred can bake a pie with opportunity cost of 7 cookies. Bill has less opportunity cost of Pie in terms of Cookies, so should sell it to Fred.

The trade between them will be beneficial only if : both of them gain from trade - i.e get a good at lower opportunity cost than their own. Fred getting 1 pie per 6 cookies is better than his own sacrifise ratio i.e 1pie : 7 cookies.  Bill getting 1 cookie per 0.16 (1/6) pie is better than his own sacrifise ratio i.e 1cookie : 0.25pie (1/5)

3 0
3 years ago
Too Young, Inc., has a bond outstanding with a coupon rate of 6.9 percent and semiannual payments. The bond currently sells for
dlinn [17]

Answer:

7.43%

Explanation:

Where the debt is publicly traded , the cost of debt is equal to the yield to maturity

Approximate yield to maturity = [coupon +(face value - market price )/ number of years to maturity ]/ [{face value + market price]/2]*100

Face value - 2000

Market price - 1905

years to maturity= 30 years

Coupon =( 6.9%*2000)/ 2 = 69

Workings

[69 + (2000-1905)/30] / [(2000+1905]/2 *100)

([69+3.17]/[(3905]/2*100)

(72.17/1952) * 100 = 3.70

Annual yield = 3.7*2= 7.4%

7.4 % being an approximate yield value , the closest option is 7.43%

8 0
3 years ago
After first obtaining a real estate sales license, said licensee must take how many DRE core three-hour approved continuing educ
Thepotemich [5.8K]

Answer:

5

Explanation:

8 0
2 years ago
Who were some of the first big business capitalists in America?
irina [24]

Answer:

Railroads were the first "big businesses" in the United States.

Explanation:

8 0
3 years ago
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