1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
allsm [11]
2 years ago
12

Reese, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December, she received

a $20,000 bill from her accountant for consulting services related to her small business. Reese can pay the $20,000 bill anytime before January 30 of next year without penalty. Assume Reese's marginal tax rate is 32 percent this year and 35 percent next year, and that she can earn an after-tax rate of return of 12 percent on her investments. a. What is the after-tax cost if she pays the $20,000 bill in December? b. What is the after-tax cost if she pays the $20,000 bill in January? Use Exhibit 3.1. c. Should Reese pay the $20,000 bill in December or January? multiple choice 1 December January d. What is the after-tax cost if she expects her marginal tax rate to be 24 percent next year and pays the $20,000 bill in January? Use Exhibit 3.1. (Round your answer to the nearest whole dollar amount.) e. Should Reese pay the $20,000 bill in December or January if she expects her marginal tax rate to be 32 percent this year and 24 percent next year? multiple choice 2 December January
Business
1 answer:
AVprozaik [17]2 years ago
5 0

Answer:

a. What is the after-tax cost if she pays the $20,000 bill in December?

= $20,000 x (1 - 32%) = $13,600

b. What is the after-tax cost if she pays the $20,000 bill in January?

total after tax cost (including investment revenue):

= $20,000 x (1 - 35%) = $13,000

= -$20,000 x 12% x 1/12 x (1 - 35%) = -$130

= $12,870

c. Should Reese pay the $20,000 bill in December or January?

January, since the after tax cost is lower

d. What is the after-tax cost if she expects her marginal tax rate to be 24 percent next year and pays the $20,000 bill in January?

= $20,000 x (1 - 24%) = $15,200

= -$20,000 x 12% x 1/12 x (1 - 24%) = -$152

= $15,048

e. Should Reese pay the $20,000 bill in December or January if she expects her marginal tax rate to be 32 percent this year and 24 percent next year?

December, since the after tax cost is lower

You might be interested in
In three years, when he is discharged from the Air Force, Steve wants to buy an 8,000 power boat.
eduard

Steve will get $11360 with the process of simple interest.

<h3>what is simple interest?</h3>

Simple interest is calculated based on a loan's principal or the initial deposit into a savings account. Simple interest doesn't compound, therefore a creditor will only charge interest on the principal sum, and a borrower will never be required to pay further interest on the interest that has already accrued.

Rate of interest = 14%

principal + interest = $8000

Time = 3 years

Simple interest

=\frac{8000 \times 3 \times 14}{100}\\=3360

Now principal + interest = 8000+3360 = 11360

Therefore, Steve will get $11360.

To learn more about simple interest from the given link

brainly.com/question/25793394

#SPJ4

4 0
2 years ago
A portfolio is comprised of 100 shares of Stock A valued at $22 a share, 600 shares of Stock B valued at $17 each, 400 shares of
Dafna1 [17]

Answer:

.4792 or 47.92%

Explanation:

The computation of the weight of C is shown below:

But before that first determine the following things

For A is

= 100 × $22

= $2200

For B

= 600 × $17

= $10200

For C

= 400 × $46

= $18400

For D

= 200 × $38

= $7600

So,

Total = 38400

And, finally

weight of C is

= $18,400 ÷ $38,400

= .4792 or 47.92%

6 0
2 years ago
What are the basic need-to-know things about wound care nursing?
Oksanka [162]
You need to put in love
8 0
3 years ago
Under the average cost method, the flow of costs through the accounting records will ___ to the physical flow of goods through t
cricket20 [7]
I think it's D
I hope this helps
7 0
3 years ago
What type of stores rely on their large size and very deep selection to try to dominate the market?
andrew-mc [135]
Power retailers are the stores that rely on their large size and very deep selection to try to dominate the market. 
Specialty stores are small, so you can eliminate that option immediately. Department stores are usually found within another store, so that's not correct too. Discounters don't have a very deep selection, they usually sell a lot of various things. Anchor stores are found within malls, so that's incorrect too. 
8 0
3 years ago
Other questions:
  • Lightning Cycles, Inc., makes Lightning-brand motorcycles and accessories, which are distributed to authorized dealers, includin
    7·1 answer
  • S4-14 Calculating the current ratio End of the Line Montana Refrigeration has these account balances at December 31, 2018: Accou
    15·1 answer
  • As discussed in the narrated power point presentation on groups and teams, _____________ is one of the most important advantages
    13·1 answer
  • Innovation efforts of the firm often benefit from partnering with non-business entities such as universities and government agen
    10·1 answer
  • Which of the following statements is CORRECT?a. A major disadvantage of financing with preferred stock is that preferred stockho
    12·1 answer
  • At the end of April, Cavy Company had completed Jobs 766 and 765. The individual job cost sheets reveal the following informatio
    13·1 answer
  • Stanley likes using fountain pens. When he came across a new series of fountain pens manufactured by Dilloit Pens, he eagerly bo
    14·1 answer
  • Your Godmother left you an inheritance of ​$100,000​, payable to you when you turn 26 years old. You are now 21.​ Currently, the
    14·1 answer
  • Bonnie invested $8,000 in two accounts paying 5% and 6% annual interest. Her money earned a total of $445 in interest in one yea
    8·1 answer
  • What does it mean to have liability for a company?
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!