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kolezko [41]
3 years ago
8

Sally was an all-state soccer player during her junior and senior years in high school. She accepted an athletic scholarship fro

m State University. The scholarship provided the following:
Tuition and fees $15,000
Housing and meals $6,000
Books and supplies $1,500
Transportation $1,200
a. Determine the effect of the scholarship on Sally's gross income.

Included in/Excluded from
Income
Tuition and fees
Housing and meals
Books and supplies
Transportation
b. Sally's brother, Willy, was not a gifted athlete, but he received $8,000 from their father's employer as a scholarship during the year. The employer grants the children of all executives a scholarship equal to one-half of annual tuition, fees, books, and supplies. Willy also received a $6,000 scholarship (to be used for tuition) as the winner of an essay contest related to bioengineering, his intended field of study. Indicate whether the following statements are "True" or "False" regarding the effect of the scholarships on Willy's and his father's gross income.

• The $8,000 scholarship is additional compensation to Willy's father and is included in his gross income.
• The scholarship is simply a payment to assist children of employees seeking an education and so is excluded from Willy's father's gross income.
• The $6,000 scholarship is taxable to Willy since he received it as a result of a contest.
Business
1 answer:
Y_Kistochka [10]3 years ago
7 0

Answer:

a. Determine the effect of the scholarship on Sally's gross income.

The $15,000 received for tuition- fees and the 1,500 received for books supplies can be excluded from Sally’s gross income as a scholarship. The $6,000 received for housing and meals and the 1,200 received for transportation has to be included in the gross income.

b. Sally’s brother, Willy, was not a gifted athlete, but he received $8,000 from their father’s employer as a scholarship during the year. The employer grants the children of all executives a scholarship equal to one-half of annual tuition, fees, books, and supplies. Willy also received a $6,000 scholarship (to be used for tuition) as the winner of an essay contest related to bioengineering, his intended field of study. Indicate whether the following statements are "True" or "False" regarding the effect of the scholarships on Willy's and his father's gross income.

• The $8,000 scholarship is additional compensation to Willy's father and is included in his gross income.

True.

The $ 8,000 is additional compensation to Willy’s father. Therefore, the father should include this amount in his gross income.

• The scholarship is simply a payment to assist children of employees seeking an education and so is excluded from Willy's father's gross income.

False.

• The $6,000 scholarship is taxable to Willy since he received it as a result of a contest.

False.

$6,000 is a scholarship which is used for tuition and is not taxable.

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Answer:

both companies should invest because the NPV of both companies are positive

Explanation:

Net present value is the present value of after-tax cash flows from an investment less the amount invested.  

NPV can be calculated using a financial calculator  

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When choosing between positive NPV projects, choose the project with the highest NPV first because it is the most profitable.

Cash flow in year 0 = - $8.4 million

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To find the NPV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

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0.54

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During December, Far West Services makes a $3,200 credit sale. The state sales tax rate is 6% and the local sales tax rate is 2.
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Answer:

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Cr Sales 3,20

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Since $3,200 is the credit sale and the state sales tax rate is 6% while the local sales tax rate is 2.5% which means we have to calculate for 6% of 3,200 as well as 2.5% of 3,200 which is: Sales tax payable

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The last step is to Debit Accounts receivable with 3,472 (3,200+272) , Credit Sales 3,200 and Credit Sales tax payable with 272

Far West Services Journal entry

Dr Accounts receivable 3,472

(3,200+272)

Cr Sales 3,200

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