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shusha [124]
3 years ago
7

Mathis Co. at the end of 2017, its first year Of operations, prepared a reconciliation between pretax financial income and taxab

le income as follows.Pretax financial income $ 1,200,000Estimated litigation expense $ 3,000,000Installment sales (2,400,000)Taxable income $ 1,800,000
The estimated litigation expense of $2750000 will be deductible in 2022 when it is expected to be paid. The gross profit from the installment sales will be realized in the amount of $1100000 in each of the next two years. The estimated liability for litigation is classified as noncurrent and the installment accounts receivable are classified as $1100000 current and $1100000 noncurrent. The income tax rate is 20% for all years.

Find the income tax expense, the deffered tax asset to be recognized, and the defferred tax liablitiy to be recognized.

Business
1 answer:
hram777 [196]3 years ago
4 0

Answer:

$360,000, $ 900,000, $360,000

Explanation:

Particulars Amount

Income tax payable($1, 800,000 * 30%) $ 540,000

Less: Change in deferred tax asset ($3,000,000 *30%) $ 9,000,000

Add: Change in deferred tax liability ($ 2,400,000 * 30%) $ 720, 000

Income tax expense $ 360,000

Deferred tax asset ($ 3,000,000 *30%) = $ 900,000

Deferred tax asset = $ 900,000 non current

Deferred Tax liability to be recognized($ 1, 200,000 * 30%)  $360,000

check the attached file for well formatted solution

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You would like to purchase one Class A share of Berkshire Hathaway through your Scottrade brokerage account. Scottrade charges a
Bumek [7]

Answer:

The current​ bid/ask spread for Berkshire Hathaway Class A​ shares is $935

Explanation:

The computation of the current bid/ask price is shown below:

The Current bid/ask price = Ask price - Bid price

                                   = $263,810 - $262,875

                                   = $935

The commission amount should be ignored in the computation part. Hence, it will not be considered as it is not relevant.

5 0
2 years ago
Suppose that a portfolio has a beta of 1.15. Over the period of one year, the portfolio had a return of 12.4% with a standard de
Darina [25.2K]

Answer and Explanation:

Given:

Weighted average β = 1.15

Average return (r) = 12.4%

Risk free return (Rf) = 1.2%

Market return (Rm) = 10.2%

Standard deviation (SD) = 16.2%

Computation of Jensen's α :

Jensen's α = r - [Rf + β(Rm - Rf)]

Jensen's α = 12.4% - [1.2% + 1.15(10.2% - 1.2%)]

Jensen's α = 12.4% - [1.2% + 10.35%]

Jensen's α = 12.4% - 11.55%

Jensen's α = 0.85%

Computation of Treynor's index :

Treynor's index (Ratio) = (r - Rf) / β

Treynor's index (Ratio) = (12.4% - 1.2%) / 1.15

Treynor's index (Ratio) = 11.2% / 1.15

Treynor's index (Ratio) = 9.73913043%

Treynor's index (Ratio) = 9.74% (Approx)

Computation of Sharpe's index :

Sharpe's index (Ratio) = (r - Rf) / SD

Sharpe's index (Ratio) = (12.4% - 1.2%) / 16.2%

Sharpe's index (Ratio) = 11.2% / 16.2%

Sharpe's index (Ratio) = 0.69 13%

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3 years ago
Which of the following is a comparative advantage?
Advocard [28]
Where are the options?
4 0
3 years ago
Union Local School District has a bond outstanding with a coupon rate of 2.8 percent paid semiannually and 16 years to maturity.
mafiozo [28]

Answer:

$4,420.35

Explanation:

Bond Price = C x [1 - (1 + r)^{-n} / r] + F / (1 + r)^{n}

Where:

  • C = Coupon
  • r = Yield to Maturity
  • n = compounding periods to maturity

Now we plug the amounts into the formula =

Bond Price = $140 x [1 - (1 + 0.034)^{-32} / 0.034] + $5,000 / (1 + 0.034)^{32}

Bond Price = $4,420.35

3 0
3 years ago
(50 POINTS) 1 HOUR TO ANSWER PLEASE HELP. LIFE INSURANCE?
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