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Kruka [31]
3 years ago
11

At the end of the year, Sheffield Co. has pretax financial income of $616,000. Included in the $616,000 is $78,400 interest inco

me on municipal bonds, $28,000 fine for dumping hazardous waste, and depreciation of $67,200. Depreciation for tax purposes is $50,400. Compute income taxes payable, assuming the tax rate is 30% for all periods.
Business
1 answer:
SVEN [57.7K]3 years ago
3 0

Answer:

$173,820

Explanation:

pretax financial income $616,000

- interest income on municipal bonds ($78,400)

+ depreciation ($67,200 - $50,400) = $16,800

+ fine for dumping hazardous materials $25,000

taxable income = $579,400

income taxes payable = $579,400 x 30% = $173,820

Fines are not tax deductible, and since depreciation for tax purposes is lower than accounting depreciation, you must add them. But since municipal bonds are not taxable, they must be subtracted.

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Sherry, who is 52 years of age, opened a Roth IRA three years ago. She has contributed a total of $13,200 to the Roth IRA ($4,40
Alexxandr [17]

Answer

The answer and procedures of the exercise are attached in the following archives.

Explanation  

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.  

7 0
3 years ago
PHRASE TERM 1. A "plug" for the net effect of the current tax liability and changes in deferred tax assets and liabilities. 2. N
lesya [120]

This question is incomplete, here´s the complete question.  

Listed below are 5 terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the number for the most correct term.

Terms: Balance sheet classification, Income tax expense, Permanent difference, Temporary difference, Valuation allowance

1. A "plug" for the net effect of the current tax liability and changes in deferred tax assets and liabilities.

2. No tax consequences.

3. "More likely than not" test.

4. Produces future taxable amounts or future deductible amounts.

5. Noncurrent.

Answer:

1. A "plug" for the net effect of the current tax liability and changes in deferred tax assets and liabilities.

Income tax expense

2. No tax consequences. Permanent difference

3. "More likely than not" test. Valuation allowance

4. Produces future taxable amounts or future deductible amounts. Temporary difference

5. Noncurrent. Balance sheet classification

Explanation:

1. A "plug" for the net effect of the current tax liability and changes in deferred tax assets and liabilities. Income tax expense.

A deferred tax asset could be used to lessen taxable income.

A deferred income tax liability is the result of the difference between the income tax expense in the income statement and the income tax payable.

2. No tax consequences. Permanent difference

because

Since a permanent difference can never be erased, it won´t create deferred taxes.

3. "More likely than not" test. Valuation allowance

A valuation allowance is required agains a deferred tax asset if it´s "more likely than not" that part or even all of the deferred tax asset won´t be realized.

4. Produces future taxable amounts or future deductible amounts. Contrary to the permanent difference case, a temporary difference will produce future taxes.

5. Noncurrent. Balance sheet classification

Noncurrent assets appear in a balance sheet as investment, property, plant, equipment, intangible assets.

3 0
2 years ago
Ajax Corporation has just decided to let managers work from home one day a week. This decision will
Viefleur [7K]

Answer: Option B        

                       

Explanation: In simple words, increase in supply of managers refers to the condition in which the quantity of managers willing to work in certain situations increases due to change in some factors.

As in the given case, the company is offering one day work from home facility to the employees which is beneficial for the personnel in many way as they will get extra time for their social life and will save efforts and time they invest while commuting from their residence to office.

Hence due to this decision their utility satisfaction from the job will increase which will further lead to increase in supply of managers in the organisation.

5 0
3 years ago
Longhorn Company reports current E&P of $100,000 in 20X3 and a deficit of ($200,000) in accumulated E&P at the beginning
ikadub [295]

Answer: Dividend of $100,000, Capital Gain of $100,000 and Tax Free Return on basis of $100,000

Explanation:

Longhorn Company reports current E&P of $100,000 in 20X3 and still distributed $300,000 to it's sole shareholder. Because it had $100,000 in current E&P, that is all it can declare as Dividends. For this reason, the shareholder will recognize $100,000 as Dividends.

The Shareholder has a basis of $100,000 in the stock of Longhorn. As a result of this, $100,000 of the Distribution will be termed a TAX FREE Return on Basis because he is receiving a return on his basis that is neither a dividend nor capital gain.

The remaining $100,000 will be considered a Capital Gain as it reflects a rise in his stock.

4 0
3 years ago
A company manufactures and sells two products: Product A1 and Product C4. Data concerning the expected production of each produc
Free_Kalibri [48]

Answer:

Unitary cost= $4,207.85

Explanation:

Giving the following information:

Product C4:

Production= 200 units

Direct labor hours per unit= 1

Total DLH= 200

The direct labor rate is $27.40 per DLH.

The direct materials cost per unit is $267

Activity Cost Pools -  Overhead Cost - Product C4 -  Total

Labor-related DLHs $558,452 - 7,700 - 14,900

Production orders Orders $75,240 - 600 - 1,100

General factory MHs $886,410 - 4,600 - 9,000

<u>First, we need to calculate the predetermined overhead rate for each activity:</u>

<u></u>

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Labor-related= 558,452/14,900= $37.48 per DLH

Production orders= 75,240/1,100= $68.4 per order

General factory= 886,410/9,000= $98.49 per machine hour

<u>Now, we can allocate overhead to C4 as a whole:</u>

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Labor-related= 37.48*7,700= $288,596

Production orders= 68.4*600= $41,040

General factory= 98.49*4,600= $453,054

Total= $782,690

<u>Finally, the total cost and cost per unit:</u>

Total cost= 200*267 + 200*27.4 + 782,690

Total cost= $841,570

Unitary cost= 841,570/200= $4,207.85

6 0
3 years ago
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