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Varvara68 [4.7K]
3 years ago
11

Oriole Company made the following journal entry in late 2021 for rent on property it leases to Danford Corporation. Cash 153000

Unearned Rent Revenue 153000 The payment represents rent for the years 2022 and 2023, the period covered by the lease. Oriole Company is a cash basis taxpayer. Oriole has income tax payable of $233000 at the end of 2021, and its tax rate is 25%. Assuming the income taxes payable at the end of 2022 is $258000, what amount of income tax expense would Oriole Company record for 2022?
Business
1 answer:
Morgarella [4.7K]3 years ago
6 0

Answer:

$277,125

Explanation:

The calculation of  income tax expense is shown below:-

Income tax expense = Income taxes payable at the end of 2022 + (Rent revenue ÷ 2) × Tax rate

= $258,000 + (($153,000 ÷ 2) × 0.25)

= $258,000 + $76,500 × 0.25

= $258,000 + $19,125

= $277,125

Therefore for computing the income tax revenue we simply applied the above formula.

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Rosewood Company made a loan of $16,000 to one of the company's employees on April 1, 2020. The one-year note carried a 6% rate
Nady [450]

Answer:

loan interest revenue  for 2020 is $720

loan interest revenue for 2021 is $240

Explanation:

The loan interest revenue in the year 2020 is for 9 months out of the total loan tenure of twelve months:

interest revenue for 2020=$16,000*6%*9/12=$720.00  

This would be debited to interest receivable and credited to interest revenue account.

interest revenue for 2021=$16,000*6%*3/12=$240.00  

3 0
3 years ago
Read 2 more answers
Robert invested $4,000 five years ago at 4 percent interest. He takes out all his interest earnings and spends them immediately.
docker41 [41]

Answer:

simple interest

Explanation:

Simple interest is the amount of money that an investment earns during 1 given period, it is calculated by multiplying the principal amount of the investment by the interest rate = $4,000 x 4% = $160

On the other hand, compound interest is interest that gains more interest by itself. This means that the interest gained during a given period, will gain more interest itself for the next period. It is calculated using the following formula = principal amount x (1 + interest rate)ⁿ, where n is the number of periods.

7 0
3 years ago
A firm’s current profits are $ 400,000. These profits are expected to grow indefinitely at a constant annual rate of 4 percent.
horrorfan [7]

Answer:

$20,800,000

Explanation:

The formula and computation is shown below:

Value of the firm = {(Firm's current profits) × (1 + firm’s opportunity cost of funds)} ÷ (firm’s opportunity cost of funds - constant growth annual rate)

= {($400,000) × (1 + 0.06) ÷ (0.06 - 0.04)

= $424,000 ÷ 0.02

= $21,200,000

Hence, we recognized all the information which is mentioned in the question.  

6 0
3 years ago
A company’s past experience indicates that 60% of its credit sales are collected in the month of sale, 30% in the next month, an
Naddika [18.5K]

Answer:

$213,250

Explanation:

The calculation of cash inflow is shown below:-

                    Expected cash collections

                       For the month of June

Months       Sales              Percentage     Expected collections

April           $282,500        5%                    $14,125

May            $213,750         30%                  $64,125

June           $225,000        60%                 $135,000

Total collection in the month of June        $213,250

Here we assume Sales for April$282,500, May $213,750 and June $225,000.

Please ignore the last value as it is not relevant to the question

4 0
3 years ago
Lakeside Inc. produces a product that currently sells for $57.60 per unit. Current production costs per unit include direct mate
Sidana [21]

Answer:

It is convenient to make the changes.

Explanation:

Giving the following information:

Selling price= $57.60 per unit.

Direct materials= $22

Direct labor= $24

Variable overhead= $11.00

Fixed overhead= $11.00.

New costs:

Direct material cost= 22*1.2= $26.4

Direct labor cost= 24*1.2= $28.8

<u>I suppose that the selling price will increase by $40.</u>

To determine whether the changes increase profit or not, we need to calculate the unitary contribution margin per unit for both options:

Contribution margin= selling price - unitary variable cost

Actual Contribution margin:

Contribution margin= 57.6 - (22 - 24 - 11)= 0.6

New contribution margin:

Contribution margin= 97.60 - (26.4 - 28.8 - 11)= $31.4

5 0
3 years ago
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