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Anestetic [448]
3 years ago
7

Jurisdiction B levies a flat 7 percent tax on the first $5 million of annual corporate income. Required: Jersey Inc. generated $

3.9 million income this year. Compute Jersey’s income tax and determine its average and marginal tax rate on total income. Leray Inc. generated $9.6 million income this year. Compute Leray’s income tax and determine Leray’s average and marginal tax rate on total income. What type of rate structure does Jurisdiction B use for its corporate income tax?
Business
1 answer:
Pie3 years ago
6 0

Answer:

a. Jersey Inc. generated $3.9 million income this year.

Income tax

= 3.9 million * 7%

= $273,000

The Average tax rate

= Tax/ Income

= 273,000/3.9 million

= 7%

<em>Marginal tax is the additional tax per dollar. As this is less than the $5 million threshold, it is 7%</em>

b. Leray Inc. generated $9.6 million income this year.

Income tax

= 5 million * 7%

= $350,000

The Average tax rate

= Tax/ Income

= 350,000/9.6 million

= 3.6%

Marginal tax is the additional tax per dollar. As this is more than the $5 million threshold, and they do not have to pay any more tax, the Marginal rate is 0%.

c. What type of rate structure does Jurisdiction B use for its corporate income tax?

<u>Regressive Rate structure</u>

In this regime, the average tax decreases as the income earned increases. Looking at Leray Inc, this appears to be the case so this is a Regressive Rate Structure.

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adoni [48]

Answer:

double-blind experiment

Explanation:

A double-blind experiment is one in which both the experimenter and the subjects don't have knowledge of which treatment is given to which participant.

The aim of this method is to avoid bias especially from demand characteristics (experimenter expectation) and placebo effect (perception of benefit from an ineffective substance).

Double-blind experiment is used when CureAll develops a new drug to treat restless legs syndrome, and test the drug's efficacy is designed in such a way that neither the experimenter administering the drug or participants knows which drug is administered.

4 0
3 years ago
Vaughn Manufacturing purchased equipment for $12240 on January 1, 2017. The company expects to use the equipment for 5 years. It
tresset_1 [31]

Answer:

Accumulated Depreciation as on  31st December 2017 is 2448

Explanation:

Depreciation using straightline method=<u>Cost of equipment-salvagevalue</u>

                                                                           useful life of the asset

Depreciation =<u> 12,240-0</u>

                            5years

Depreciation on 31st December 2017 = $2448

<u></u>

<u></u>

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3 0
3 years ago
Piper Company sells merchandise on account for $1,800 to Morton Company with credit terms of 2/10, n/30. Morton Company returns
NNADVOKAT [17]

Answer:

The journal entry is as follows:

Cash A/c Dr. $1,176

Sales returns and allowances A/c Dr. $600

Sales discounts A/c Dr. $24

       To accounts receivable                $1,800

(To record the receipt of the check)

Workings:

Sales discount = 2% of ($1,800 - $600)

                        = 0.02 × $1,200

                        = $24

3 0
3 years ago
The CAPM/SML and Discounted Cash Flow approaches to estimating the cost of retained earnings will be the same under which of the
ValentinkaMS [17]

Answer

(A) The company's common stock price is in equilibrium.

Explanation  

The main difference between preferred and common stock is that preferred stock gives no voting rights to shareholders while common stock does. Preferred shareholders have priority over a company's income, meaning they are paid dividends before common shareholders.

8 0
3 years ago
Suppose that the manager of a restaurant has two new employees, Rahul and Henriette, and is trying to decide which one to assign
romanna [79]

Answer:

a. Who should be assigned to chop vegetables?

  • Henriette

b. Who should be assigned to wash dishes?

  • Rahul

Explanation:

we need to determine the opportunity cost of each employee:

Rahul's opportunity cost of chopping one pound of vegetables = 100 / 20 = washing 5 dishes per hour.

Rahul's opportunity cost of washing 1 dish per hour = 20 / 100 = 0.2 pounds of chopped vegetables.

Henriette's opportunity cost of chopping one pound of vegetables = 120 / 30 = washing 4 dishes per hour.

Henriette's opportunity cost of washing 1 dish per hour = 30 / 120 = 0.25 pounds of chopped vegetables.

Rahul should wash dishes while Henriette should chop vegetables because their opportunity cost of performing these activities is lower.

4 0
2 years ago
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