Answer:
A) Gift loans of $14,000 in which interest foregone is in the form of a gift.
Explanation:
You are free to give anyone any type of gift that is worth up to $14,000, this includes gifts in cash, assets (e.g. car) or gift loans. Any gift above that threshold will result in taxes paid by the person that receives the gift.
The IRS defines gift loans under Section 7872(f)(3) as:
<em>“The term “gift loan” is any below-market loan where the forgoing of interest is in the nature of a gift.”</em>
As long as the forgone interest doesn't exceed $14,000, then no taxes should be paid.
Answer:
Direct labor cost will be equal to $236000
Explanation:
We have given total manufacturing cost = $450000
Manufacturing overhead totaling is equal to $98000
And direct material totaling is equal to $116000
We have to find the direct labor cost
Direct labor cost is equal to
Direct labor cost = Total manufacturing cost - manufacturing overhead totaling - direct material totaling
= $450000 - $98000 - $116000 = $236000
So direct labor cost will be equal to $236000
It becomes easier for businesses to borrow money when the federal reserve increases money supply. Money supply is the quantity of currency and other liquid instruments that are circulating in a nation's economy at a particular time. The central bank of a country can increase the money supply by purchasing government securities on the open market, thereby increasing available funds to private banks. Private banks are thus empowered to lend money to businesses.
Answer:
the current income tax expense or benefit is $103,583
Explanation:
The computation of the current income tax expense or benefit is shown below:
Current income tax expense is
= (pre - tax book income - favourable temporary difference + unfavorable temporary difference + unfavourable permanent difference) × tax rate
= ($365,000 - $13,750 + $97,000 + $45,000) × 21%
= $493,250 × 21%
= $103,583
We assumed the tax rate be 21%
hence, the current income tax expense or benefit is $103,583
Answer:
a) = 40660 units
b) = $335,445
c) = 58242 units
Explanation:
Lets summarize the information first,
F.C = $185,000
Direct Material (DM) = $3.20
Direct Labor (DL) = $6.00/hr or 6/12 = $0.5/product
Selling Price (SP) = $8.25
For a)
Break Even qty = F.C/Contribution Margin (CM)
CM = SP - (DM +DL per product) = 8.25 - (3.2 + 0.5) = $4.55
Break even qty = 185000 / 4.55 = 40659.3 or 40660 units
For b)
The break even qty does not change with sales so at 55000 units of sale the qty required for B.E is still 40660 units thus B.E Sales = 40660* 8.25
Break even sales = $335,445
For c)
This can be calculated by factoring target profit into the fixed costs so,
Quantity @ target profit = F.C + Target profit / C.M
So,
Quantity @ target profit = 185000 + 80000 / 4.55 = 58242 units rounded off.
