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never [62]
2 years ago
8

Firm A has a 21 percent marginal tax rate, and Firm Z has a 28 percent marginal tax rate. Firm A owns a controlling interest in

Firm Z. The owners of Firm A decide to incur a $9,500 deductible expense that will benefit both firms.
Required:
Compute the after-tax cost of the expense assuming that:
a. Firm A incurs the expense
b. Firm Z incurs the expense
Business
1 answer:
Aliun [14]2 years ago
3 0

Answer:

a. $7,505

b.$6,840

Explanation:

a. Computation for the after-tax cost of the expense assuming that Firm A incurs the expense

Using this formula

After-tax cost = Deductible Expense - (Firm A Marginal tax rate* Deductible Expense)

Let plug in the formula

After-tax cost = ($9,500 - ($21%*9500)

After-tax cost = ($9,500 - $1,995)

After-tax cost=$7,505

Therefore the after-tax cost of the expense assuming that Firm A incurs the expense is $7,505

B. Computation for the after-tax cost of the expense assuming that Firm Z incurs the expense

Using this formula

After-tax cost = Deductible Expense - (Firm Z Marginal tax rate*Deductible Expense)

Let plug in the formula

After-tax cost =$9,500 -(28%*$9500)

After-tax cost =($9,500 - $2,660 )

After-tax cost=$6,840

Therefore the after-tax cost of the expense assuming that Firm Z incurs the expense is $6,840

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On March 1, the Mixing Department had 550 rolls of paper in process. During March, the Mixing Department completed the mixing pr
inn [45]

For the Mixing Department, the following journal entries are prepared.

Journal Entries:

1. Debit Work in Process $13,095

Credit Direct materials $5,720

Credit Direct labor $4,125

Credit Manufacturing overhead $3,250

  • To record costs of materials, labor, and manufacturing overhead allocated.

2. Debit Transfer out $13,630

Credit Work in Process $13,630

  • To record the cost of units completed and transferred out.

Data and Calculations:

                                       Direct       Direct     Mfg o/h       Total

                                     Materials    Labor    Allocated     Costs

Beginning inventory        $280        $365        $180        $825

Costs added in March    5,720        4,125      3,250      13,095

Total costs                   $6,000    $4,490    $3,430    $13,920

                                            Physical         Direct       Conversion

                                               Units        Materials         Costs

<u>Units to account for:</u>

Beginning Work in process    550

Started in March                  4,650

Total units to account         5,200

Completed & transferred    4,700

Ending work in process         500

<u>Units accounted for:</u>

Ending work in process       500            100 (20%)         100 (20%)

Completed & transferred  4,700        4,700 (100%)    4,700 (100%)

Total equivalent units                         4,800                4,800

                                            Direct       Conversion     Total

                                         Materials         Costs         Costs

<u>Costs to account for:</u>

Beginning inventory          $280               $545        $825

Costs added in March      5,720               7,375      13,095

Total costs                     $6,000            $7,920    $13,920

Total equivalent units      4,800              4,800

Cost per equivalent unit $1.25              $1.65

                          ($6,000/4,800)             ($7,920/4,800)

<u>Costs accounted for:</u>

Completed & transferred $5,875           $7,755        $13,630

                              (4,700 x $1.25)        (4,700 x $1.65)

Ending inventory                  $125              $165               $290

                                 (100 x $1.25)         (100 x $1.65)

Total costs accounted    $6,000            $7,920       $13,920

Learn more: brainly.com/question/24246457

7 0
2 years ago
For questions 1-10, fill in the blank with the letter of the term that best matches the description.
LuckyWell [14K]

Following are the correct terms for the descriptions provided.

1. Coverage

2. Risk Management

3. Insurer

4. Premium

5. Liability

6. Policy

7. Actuary

8. Claim

9. Deductible

10. Insurance

<h3>Explanation</h3>

The correct answers for the explanation given in the question is described above.

An Insurance Company is called an Insurer, its products are called policy, they provide coverage for loss, this is a type of risk management, a person calculating all the figures is known as an Actuary, monthly or annually premiums are payable and claim can be made once the insured condition is met.

<h3 />

Therefore the answers are following

1. Coverage

2. Risk Management

3. Insurer

4. Premium

5. Liability

6. Policy

7. Actuary

8. Claim

9. Deductible

10. Insurance

Learn more about Business at brainly.com/question/26538066

3 0
2 years ago
If you go to ohva pls reply to this comment i have a question !! :))
velikii [3]

Answer:

hello please stop posting stuff that are unnecessary.thank you have a Wonderful day.

Explanation:

7 0
3 years ago
In the AD partnership, Allen's capital is $140,000 and Daniel's is $40,000 and they share income in a 3:1 ratio, respectively. T
Mamont248 [21]

Answer:

D) 137000 39000

Explanation:

Allen  140,000

Daniel 40,000

Capital before admission 180,000

share ratio 3:1

Capital after admission:

180,000 + 40,000 = 220,000

David participation: 20%

220,000 x 20% = 44,000

David investment  40,000

goodwill: 4,000

There is a difference in goodwill which will be supported for the old partner as their current share ratio

Allen 4,000 x 3/4 = 3,000

Daniel 4,000 x 1/4 = 1,000

Capital after David admission:

140,000 - 3,000 = 137,000

40,000 - 1,000 = 39,000

6 0
3 years ago
In the last few decades the car manufacturing sector has found it difficult to compete with foreign car imports. High labor cost
vladimir2022 [97]

Answer: c. It could allow real wages to downwardly adjust more easily.

Explanation:

When there is modest inflation, companies in the car manufacturing industry can simply decide not to increase nominal wages. This would lead to a fall in real wages as inflation would ensure that the nominal wages are less than they were worth before.

This decrease in real wages will allow the companies in the industry to reduce labor costs in real terms and become more competitive with the foreign manufacturers.

3 0
3 years ago
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