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e-lub [12.9K]
3 years ago
8

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

a $23,000 bill from her accountant for consulting services related to her small business. Reese can pay the $23,000 bill anytime before January 30 of next year without penalty. Assume Reese’s marginal tax rate is 32 percent this year and will be 37 percent next year, and that she can earn an after-tax rate of return of 7 percent on her investments.
a. What is the after-tax cost if she pays the $39,000 bill in December?
After-tax cost 26,520
b. What is the after-tax cost if she pays the $39,000 bill in January? (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.)
After-tax cost
c. Should Reese pay the $39,000 bill'in December or Jahuary?
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 $39,000 bill in January? Use Exhibit 31. (Round your answer to the nearest whole dollar amount.)
After-tax cost
e. Should Reese pay the $39,000 bill in December or January if she expects her marginal tax rate to be 32 percent this year and 24 percent next year?
December
January
Business
1 answer:
muminat3 years ago
3 0

Answer:

a. What is the after-tax cost if she pays the $39,000 bill in December?

= $23,000 x (1 - 32%) = $15,640

b. What is the after-tax cost if she pays the $39,000 bill in January? (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.)

total after tax cost (including investment revenue):

= $23,000 x (1 - 37%) = $14,490

= -$23,000 x 7% x 1/12 x (1 - 37%) = -$84.53

= $14,405.47

c. Should Reese pay the $23,000 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 $23,000 bill in January?

= $23,000 x (1 - 24%) = $17,480

= -$23,000 x 7% x 1/12 x (1 - 24%) = -$101.97

= $17,378.03

e. Should Reese pay the $23,000 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

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The following stockholders' equity accounts were taken from the balance sheet of LAH Corporation as of December 31, 2019 Common
Blizzard [7]

Answer:

1) 30,000 shares issued

2) Common stock average price: 12.1 dollars

   book value: $ 22.49

3)  135,000 dividends to common stockholders

Explanation:

1) preferred stock equity $ 3,000,000 / $ 100 par value = 30,000 shares issued

2)

common stock: 400,000 issued x $10 face value : 4,000,000

additional paid-in in excess of par value:                    840,000

                                                total paid-in                4,840,000

average common stock price: $ 4,840,000/400,000 shares = 12.1

on average common stock were issued at 12.1 dollars

common stock book value:

(common stock + retained earnings - preferred stock)/outstanding shares

(4,840,000 + 4,260,000 - 105,000)/ 400,000 = 22.4875

3) if 450,000 dividends are distributed:

the compamy will first pay the preferred stocks:

30,000 x $ 100 x 7% =  210,000

dividends in arrears:     105,000

 total preferred stock   315,000

bond to common stock:

450,000 declared - 315,000 preferred stock: 135,000 for common stock

4 0
3 years ago
Consider two neighboring island countries called Euphoria and Contente. They each have 4 million labor hours available per week
liubo4ka [24]

Explanation:

here is an explanation and solution to your question

For Euphoria:

The opportunity cost of producing a unit of rye in terms of jeans =20/5 = 4

for contente:

The opportunity cost of producing a unit of rye in terms of jeans = 16/8 = 2

opportunity cost of producing 1 unit of jean in terms of unit of rye:

for euphoria = 5/20 = 1/4

for contente = 8/16 = 1/2

1.

Euphoria's opportunity cost of producing a a bushel of rye is 4 pairs of jeans.

contentes opportunity cost of producing a bushel of rye is 2 pairs of jeans.

2.

contente has comparative advantage in producing rye

euphoria has comparative advantage in jeans production

3

contente produces 8 bushels of rye so with 4 million hours of labor = 8x4 = 32 million bushels in a week.

euphoria 20 pairs of jean in a week, using 4 million hours of labor. 20x4 = 80 pairs of jean a week

8 0
3 years ago
Which is not true of a perfectly competitive market? a. At the long-run equilibrium, economic profit is less than accounting pro
shtirl [24]

Answer:

B is the correct option.

Explanation:

In theory, the perfect market is the structure in which all the firms sell identical products,They all are price takers, the market share doesn't influence the prices, firms can enter or exit the market without cost and resources are perfectly mobile. No markets are in the sphere of the perfect competition model. so they are classified as imperfect. The imperfect and perfect market is the outcome of post-classical economic thought of the Cambridge tradition.

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In September 2000 the Pullman Group arranged a bond issue for the estate of the late Marvin Gaye. The collateral on the bonds (a
nata0808 [166]

Answer:

The bond will sell for the amount of $869.17

Explanation:

According to the given data coupon amount = 50/2 = 25

Therefore, in order to calculate the selling price of the bond we would have to make the following calculation:

selling price of the bond = 25 * PVIFA(3%,52) + 1,000 * PVIF(3%,52)

selling price of the bond= 25 * 26.1662 + 1,000 * 0.2150

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The bond will sell for the amount of $869.17

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Leadership is showing the way to people and making people better.
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