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tresset_1 [31]
3 years ago
11

On December 31, 2015, Howells, Inc. appropriately changed its inventory valuation method to FIFO cost from weighted-average cost

for financial statement and income tax purposes. The change will result in a $2,000,000 increase in the beginning inventory at January 1, 2015. Assume a 30% income tax rate. The cumulative effect of this accounting change on beginning retained earnings is Group of answer choices $0. $1,400,000. $1,750,000. $2,500,000.
Business
1 answer:
il63 [147K]3 years ago
5 0

Answer:

$1,400,000

Explanation:

According to the scenario, computation of the given data are as follows,

Increase in beginning inventory = $2,000,000

Income tax rate = 30%

So, we can calculate the effect on beginning retained earning by using following formula,

Cumulative effect = Increase beginning inventory × (1 -  tax rate)

= $2,000,000 × ( 1 - 30%)

= $2,000,000 × 70%

= $1,400,000

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The people who come into our stores are friendly and value this community. You have helped develop this positive attitude throug
masya89 [10]

Answer:

The answer is False.

Explanation:

Refusing routine requests is a message strategy used by businesses to respond to issues that they do not plan to resolve.

Sometimes, this messages are automated such that when such routine request are sent in by a customer, the system responds back with an already encoded message that does not promise to reply the query.

This response is usually courteous and laced with positive language in order to help assuage the customers grief.

The case is different here because there is a promise to respond when Becky Chen added "I will contact you next week regarding the date and time of our next grand opening ceremony".

8 0
3 years ago
22. Preferred stockholders hold a claim on assets that has priority over the claims of A) both common stockholders and bondholde
DedPeter [7]

Answer:

C) common stockholders, but after that of bondholders.

Explanation:

Preferred stockholders hold a claim on assets that has priority over the claims of common stockholders but after that of bondholders.  

The preferred shareholder is given preference for the distribution of dividends, which is higher than the common stock. It is paid as per the discretion of the company´s directors. Instead, they have limited right and they do not vote for corporate governance like a common stockholder. In the case of the dissolution of the company, the preferred shareholders will still receive payment due to them in terms of dividends. They have a feature of both bonds and equity stockholders.

6 0
3 years ago
Sporting goods charges .85 percent interest per month. what rate of interest are its credit customers actually paying?
seraphim [82]
To answer this item, we assume that the interest rate is simple, such that the yearly rate was only divided by 12 months in order to determine the rate per month. Hence, to answer this item, we simply have to multiply the given percent by 12.

                          rate of interest/year = (12)(0.85%) = 10.2%

Therefore, the answer is 10.2%. 
8 0
3 years ago
Theresa Teutul was an executive with Digital Industries, a leading manufacturer of color televisions. She recognized that the co
vladimir1956 [14]

Answer:

The options for this question are the following:

a. Star

b. Cash Cow

c. Question Mark

d. Dog

e. None of these

The correct answer is b. Cash Cow .

Explanation:

The cash cow is a metaphor for a cash cow that produces milk throughout its life and requires little maintenance. A cash cow is an example of a cash cow, since after the initial capital outlay has been paid, the cow continues to produce milk for many years. These cash generators can also use their money to repurchase shares in the market or pay dividends to shareholders.

A cash cow is a company or business unit in a mature, slow-growing industry. Milk cows have a large market share and require little investment. For example, Apple (NASDAQ: AAPL) is considered a cash cow because it has established a well-defined niche in wireless gadgets. The different Apple product lines generate cash for other business lines at the beginning of their life cycle. On the contrary, a star is a company or business unit that operates in a high-growth industry. Question marks are the problematic son of the BCG shared growth matrix. They operate in high-growth markets and require capital to grow, but the probability of success is unknown. Dogs do not require much cash, but due to age, they tend to absorb large portions of capital.

6 0
3 years ago
Describe one specific way that taxes impact businesses. Describe another way that taxes impact individuals.
adelina 88 [10]

Answer:

By influencing incentives, taxes can affect both supply and demand factors. Reducing marginal tax rates on wages and salaries, for example, can induce people to work more. Expanding the earned income tax credit can bring more low-skilled workers into the labor force.

I think it might help you

7 0
3 years ago
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