Answer:
C. Insurance expense will increase $2,250
Explanation:
On April 1 2016, the following journal entry will be recorded in respect of the premium paid on a one year insurance policy:
Debit Credit
Prepaid Insurance $3,000
Cash $3,000
The year end given in this question is December 31, 2016 and the insurance premium is for one year and since the insurance premium is paid on April 1, 2016, therefore, only expense in respect of 9 months i.e. from April 1, 2016 to the December 31, 2016 will be recognised in this year. Remaining expense of three months will be recognised in the Year ended December 31,2017.
The following Journal entry will be recorded in respect of insurance expense in accounts on December 31, 2016.
Debit Credit
Insurance expense(3,000*9/12) 2,250
Prepaid Insurance 2,250
So the answer will be C. Insurance expense will increase $2,250
Answer:
Yes, because they lead people to make poor decisions.
Explanation:
Answer:
Sales Revenue 212,000
Variable Cost (63,000)
Rent Expense (43,000)
Depreciation Expense (23,000)
Income before taxes 83,000
Income tax expense <u> (16,600) </u>
Net Income 84,800
Cash from operating activities 107,800
tax-shield from depreciation 4,600
Explanation:
Cash flow from operations (indirect method)
net income 84,800 + depreciation expense = 107,800
The depreciation provides a tax shield as they are an accounting concept. The depreciation expense did not involve the outflow of cash but, it is a taxable deduction therefore generates a tax-shield.
23,000 x 20% = 4,600
Answer:
Check the following calculations that follow the answer
Explanation:
a) Amount of net pay = wages – income tax – FICA tax = 53000 – 7300 – 2775 = $42,925
b) Total Payroll Cost = wages + FICA Taxes + unemployment taxes
= 53000 + 2775 + 280 = $56,055
