<span>They allow individuals and corporations to legally reduce their taxable income. An example of a tax loophole is owning a church- these are non- taxable. However, a lot of private individuals have set up churches in their homes in recent years in order to avoid having to pay their usual taxes.</span>
Answer:
Average rate of return = 14
%
Explanation:
Average rate of return = Annual average return/ Average Investment
Average investment =( Initial investment + scrap value)/2
Average investment = 138,000 + 12,000/2 =75,000
Average annual return = Savings in cost - energy cost - depreciation
Depreciation = (initial cost - scrap value)/2= (138,000 - 12,000)/2= 12600
Average annual return = 29,780-6,680-12600= 10500
Average rate of return = 10,500/75,000 × 100= 14
%
Average rate of return = 14
%
Answer:
Journal entry to record the Sale of Patent
Debit : Cash $750,000
Credit : Patent at Book Value $120,000
Credit : Profit and Loss $630,000
Journal entry to record the Sale of Equipment
Debit : Cash $325,000
Debit : Profit and loss $75,000
Debit : Accumulated depreciation $150,000
Credit : Equipment at Cost $550,000
Explanation:
During a sale transaction the entity recognizes 1. The Cash Proceeds resulting from the sale, 2. The Profit or loss resulting from the sale, 3.The entity derecognizes the Cost or Book Value of the Asset as well as the Accumulated depreciation.
A profit of $630,000 has been earned as a result of the sale of the Patent, whereas a loss of $75,000 has been incurred as a result of sale of Equipment.
Romeo could do several things to encourage innovation for example by showing inventions created by other departments of his enterprise or by people in other companies either having the actual item or showing a video of it, and also by rewarding those who come up with new innovations with prizes for example. Of course, innovative ideas or better ways of doing things would also be encouraged.
