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3 years ago

What is meant by "tax allocation within a period"? What is the justification for such practices?

Business

1 answer:

Dima020 [189]3 years ago

6 0

Answer:

Tax allocation within a period is the practice of allocating the income tax for a period to such items as income before extraordinary items, extraordinary items and period adjustments.

Explanation:

The justification for tax allocation within a period is to produce financial statements which disclose an appropriate relationship of the different taxable income.

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Jessica purchased a home on January 1, 2018 for $580,000 by making a down payment of $230,000 and financing the remaining $350,0

Ann [662]

Answer:

$32,600

Explanation:

Calculation to determine her itemized deduction if she used the proceeds of the second loan to finish the basement in her home and landscape her yard

Using this formula

Itemized deduction =(Financing amount * 6 percent)+(Additional amount borrowed*interest rate of 8 percent)

Let plug in the formula

Itemized deduction=( $350,000 * 6 percent)+($145,000 *8 percent)

Itemized deduction=($21,000+$11,600)

Itemized deduction=$32,600

Therefore her itemized deduction if she used the proceeds of the second loan to finish the basement in her home and landscape her yard wi be $32,600

5 0

3 years ago

With regard to New United Motor Manufacturing, Inc. (NUMMI), why did General Motors (GM) enter into a strategic alliance with To

hjlf

Answer:

to learn the lean manufacturing system pioneered by Toyota

Explanation:

The main reason for this strategic alliance was in order for General Motors to learn the lean manufacturing system pioneered by Toyota. The lean manufacturing system is a methodology derived from Toyota's 1930 operating model "The Toyota Way" which focuses on minimizing waste within manufacturing systems while at the same time being able to maximize productivity. This provides a great benefit to any manufacturing company, hence why General Motors was interested.

8 0

3 years ago

Firms require capital to invest in productive opportunities. The best firms with the most profitable opportunities can attract c

Arturiano [62]

Answer:

Interest rate

Explanation:

Firms require capital to invest in productive opportunities. The best firms with the most profitable opportunities can attract capital away from inefficient firms with less profitable opportunities. Investors supply firms with capital at a cost called the <u>Interest rate</u>. The interest rate that investors require is determined by several factors, including the availability of production opportunities, the time preference for current consumption, risk, and inflation.

7 0

3 years ago

Materials used by the Instrument Division of Ziegler Inc. are currently purchased from outside suppliers at a cost of $1,350 per

Sergio039 [100]

Answer:

(a) $33750000 (b) $11250000 (c) $22500000

Explanation:

Solution

(a) How much would Ziegler Inc. total income of operating increase.

Now,

Units * (Cost of purchased from outside supplier - Variable cost)

Thus,

75000 * ($1350 - $900) = $33750000

(b) How much would the Instrument Division's operating income increase

Now,

The Units * (Cost of purchased from outside supplier - Transfer Price)

So,

75000 units * ($1350 - $1200) = $11250000

Now,

Units * (Transfer Price - Variable cost)

75000 units * ($1200 - $900) = $22500000

3 0

3 years ago

For fixed-rate bonds it's important to realize that the value of the bond has a(n)-Select relationship to the level of interest

pogonyaev

Answer:

Answer is explained in the explanation section below.

Explanation:

It's necessary to remember that the value of fixed-rate bonds is inversely proportional to the level of interest rates. The value of the bond decreases as interest rates rise; moreover, the value of the bond rises as interest rates fall. A Bond with a lower coupon sells for less than its face value. When the going rate of interest is higher than the coupon rate, this condition arises. The value of the asset would increase over time. A higher coupon bond is one that sells for a higher price than its face value. When the going rate of interest is lower than the coupon rate, this condition arises. Its value will gradually decrease until it reaches its maturity value. A par value bond that sells at par, with a coupon rate equal to the current interest rate. The coupon is usually set at the going market rate on the day the bond is sold, so it sells at par at first.

Calculations:

C = Coupon Payments = $60 (Par Value x Coupon Rate)

n = number of years = 10

i = market rate or required yield = 7% = 0.007

K = number of coupon payments in 1 year = 1

P = value at maturity or par value = 1000

Present value of ordinary annuity formula:

Bond Price = C/k * $[\frac{1 - \frac{1}{(1 + \frac{i}{k})^{nk} } }{\frac{i}{k} } ]$ + $\frac{P}{(1 + \frac{i}{k})^{nk} }$

Just plug in the values and you will get:

Bond Price = 60 x 7.02 + 508.35

Bond Price = 421.41 508.35

Bond Price = $929.76

Similarly,

Data:

C = Coupon Payments = $60 (Par Value x Coupon Rate)

n = number of years = 10

i = market rate or required yield = 7% = 0.007

K = number of coupon payments in 1 year = 2

P = value at maturity or par value = 1000

Present value of ordinary annuity formula:

Bond Price = C/k * $[\frac{1 - \frac{1}{(1 + \frac{i}{k})^{nk} } }{\frac{i}{k} } ]$ + $\frac{P}{(1 + \frac{i}{k})^{nk} }$

Just plug in the values and you will get:

Bond Price = 30 x 14.21 + 502.57

Bond Price = 426.37 + 502.57

Bond Price = $928.94

8 0

3 years ago