Explanation:
The adjusting journal entry to record the given adjustment is shown below:
At the year-end
Insurance expense A/c Dr. A/c $800
To Prepaid Insurance A/c $800
(Being insurance expense is recorded)
The computation is given below:
= Prepayment done for 6 months insurance policy - expired insurance
= $1,200 - $400
= $800
Answer:
A deferred tax liability will be reported on the balance sheet
b) trademark
as longterm assets refers to those assets that will not become cash within a one-year period
Explanation:
As the accounting makes the depreciaiton of the asset among 8 years
while the MACRS (depreciaiton for tax purposes) does it in 5 years
the company will pay lower income taxes now but, higher in the future
creating a tax liability as the tax relief occurs now.
Calculations:
Account Depreciation Expense
(cost - salvage value )/ useful life =
(130,000 - 10,000)/ 8 years = 8,000
Tax-purpose depreciation expense
130,000 x 20% = 26,000
There is a tax difference of (26,000 - 8,000) x corporate income tax
Answer:
$1,625,000
Explanation:
For computing the purchase amount first we have to determine the cost of goods sold which is shown below;
As we know that
Cost of goods sold = Sales revenue - gross profit
= $2,100,000 - $2,100,000 × 25%
= $2,100,000 - $525,000
= $1,575,000
Now the purchase amount is
Cost of goods sold = Beginning inventory + purchase - ending inventory
$1,575,000 = $310,000 + purchase - $360,000
So, the purchase amount is $1,625,000
Answer: B You find social interaction exhausting
Explanation:A P E X
Answer:
a). The required rate of return=18%
b). The stock price after 1 year is expected to be $24.78
Explanation:
Derive the expression for calculating the required rate of return as follows:
RRR=(EDP/SP)+DGW
where;
RRR=required rate of return
EDP=expected dividend payment
SP=share price
DGW=dividend growth rate
In our case:
RRR=unknown
EDP=$2.50
SP=$21.00
DGW=6%=6/100=0.06
replacing in the original expression;
RRR=(2.5/21)+0.06
RRR=0.18 or 18%
b). The expression for calculating the future value of the stock is as follows:
F.V=C.V×(1+RR)^n
where;
F.V=future value of the stock after a year
C.V=current value of the stock
RR=required rate of return
n=number of years
In our case;
C.V=$21.00 a share
RR=18%=0.18
n=1
replacing;
FV=21×(1+0.18)^1
FV=$24.78
The stock price after 1 year is expected to be $24.78
