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Anika [276]
2 years ago
6

(L.O. 2) Nolan Company sells its product on an installment basis, earning a $450 pretax gross profit on each installment sale. F

or accounting purposes the entire $450 is recognized in the year of sale, but for income tax purposes the installment method of accounting is used. Assume Nolan makes one sale in 2019, another sale in 2020, and a third sale in 2021. In each case, one-third of the gross sales price is collected in the year of sale, one-third in the next year, and the final installment in the third year. If the tax rate is 50%, what amount of deferred tax liability should Nolan Company show on its December 31, 2021 balance sheet:
Business
1 answer:
Maksim231197 [3]2 years ago
5 0

Answer:

$225

Explanation:

Calculation to determine what amount of deferred tax liability should Nolan Company show on its December 31, 2021 balance sheet:

Deferred tax liability =[ ($450/ 3) *50%]+ [($450 / 3 * 2) * 50%]

Deferred tax liability=$75+$150

Deferred tax liability = $225

Therefore the amount of deferred tax liability should Nolan Company show on its December 31, 2021 balance sheet is $225

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A company provides services to clients during the period that are neither paid for, nor billed to the clients. What must the com
Arte-miy333 [17]

Answer:

c. Accrue revenue by making an adjusting entry at the end of the period

Explanation:

As in the given situation since it is mentioned that the service is earned but not yet billed or collected so here the revenue is accrued so that the revenue could be recorded by recording the adjusting entry and there is an account receivable at the closing of the period.

Therefore according to the given options, the option c is correct and the same is to be considered

3 0
2 years ago
GreenTree Lawn and Garden Products is engaged in a review of the sales, costs, and profit projections for some new products to f
klio [65]

Answer:

False

Explanation:

the answer is false

7 0
2 years ago
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frez [133]
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5 0
3 years ago
Read 2 more answers
Dawson Toys, Ltd., produces a toy called the Maze. The company has recently established a standard cost system to help control c
svlad2 [7]

Answer:

1. a. The materials price and quantity variances

Material price variance: Standard cost per micron is $1.50 and actual cost per micron is $1.48. So, price variance is 1.48 - 1.5 = $(0.02) per micron

Quantity variance: Based on standard bill of material, Dawson Toys need 3,000 x 6 = 18,000 microns to produce 3,000 Maze toys. Actual consumption volume is 25,000 - 5,000 = 20,000 microns. So, quantity variance is 20,000 - 18,000 = 2,000 microns.

1. b. The labor rate and efficiency variances

Actual labor rate  = Actual labor cost / Actual hour = 88,000/4,000 = $22 per hour.

Efficiency variance = Actual labor rate - Standard labor rate = 22 - 21 = $1 per hour.

2. Prepare a brief explanation of the possible causes of each variance.

Direct material cost variance: Total actual material cost is 20,000 x 1.48 = $29,600, higher than standard material cost of 18,000 x 1.5 = $27,000. This is mainly due to higher production waste as compared to standards.

Direct labor cost variance: Total actual labor cost is $88,000, higher than standard labor cost of 4,000 x 21 = $84,000. This is mainly due to lower labor rate per hour than expected.

Explanation:

5 0
2 years ago
The Atlanta Braves signed an outfielder to a five-year contract. The contract calls for the following cash flows: a signing bonu
Aleonysh [2.5K]

Answer:

$63.56 million

Explanation:

We are to find the present value of the cash flows in order to determine the value of the contract today

Present value is the sum of discounted cash flows

Present value can be calculated using a financial calculator

Cash flow in year 0 = $4.00 million  

Cash flow in year 1  = $12.09 million

Cash flow in year 2  = $13.36 million

Cash flow in year 3  = $14.17 million

Cash flow in year 4  = $15.26 million

Cash flow in year 5  = $16.43 million

I = 6%

Present value = $63.56 million

To find the PV 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.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.  

3. Press compute  

6 0
3 years ago
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