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lions [1.4K]
3 years ago
11

Manny, a calendar-year taxpayer, uses the cash method of accounting for his sole proprietorship. In late December he performed $

20,000 of legal services for a client. Manny typically requires his clients to pay his bills immediately upon receipt. Assume Manny’s marginal tax rate is 37 percent this year and next year, and that he can earn an after-tax rate of return of 8 percent on his investments. Should Manny send his client the bill in December or January?
Business
1 answer:
nordsb [41]3 years ago
6 0

Answer:

Should Manny send his client the bill in December or January?

Send the bill in January because in cash method accounting recognized when payments are made.

In december he recognized only income because is in advance.

Explanation:

The cash method of accounting requires that sales be recognized when cash is received from a customer, and that expenses are recognized when payments are made to suppliers.

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Answer:

Task 1:

The answer is $700.

Task 2:

The answer is $130.

Task 3:

The answer is $20.

Task 4:

The answer is $10,570.

Task 5:

The answer is $110.

Explanation:

<h2>Task 1:</h2><h3>How much does each investor make on his investment with the 7% rate of return?</h3><h3>Solution:</h3>

Adrian & Clemens makes [$10,000*0.07] on their investment = $700.

<h2>Task 2:</h2><h3>How much does Adrian pay in fees for his actively managed mutual fund?</h3><h3>Solution:</h3>

Adrian owes to his broker = (10000*.013) = $130

<h2>Task 3:</h2><h3>How much does Clemens pay in fees for the index fund?</h3><h3>Solution:</h3>

Clemens owes to his broker= ($10000*.002) = $20

<h2>Task 4:</h2><h3>At the end of the year, what's the total value (AFTER FEES) of Adrian's mutual fund?</h3><h3>Solution:</h3>

Value of Adrian's stock = $10000+$570 (net of brokerage) = $10,570

<h2>Task 5:</h2><h3>What's the total value (AFTER FEES) of Clemens's index fund?</h3><h3>Solution:</h3>

Value of clemens' stock = $10000+$680 (net of brokerage) = $10,680

<h2>Task 6:</h2><h3>How much more value does Clemens' investment generate than Adrian's in one year's time?</h3><h3>Solution:</h3>

Clemens investment makes ($680-$570) than adrian's investment = $110

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A portfolio is comprised of equal weights of two stocks labeled Stock X and Stock Y. The covariance between Stock X and Stock Y
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Suppose during 2017 that Federal Express reported the following information (in millions): net sales of $34,450 and net income o
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Answer:

The asset turnover is 1.44 and return on assets is 0.37%

Explanation:

Average Total assets    

Assets in the beginning $24,590  

Assets at the end          $23,300  

Average assets          $23945

Sales                   $34,450  

Divide: Average assets        $23945  

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Therefore, The asset turnover is 1.44 and return on assets is 0.37%

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