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2 years ago

Ifre chapter 1, conceptual multiple

Business

1 answer:

geniusboy [140]2 years ago

5 0

Answer:

Explanation:

When the future revenue producing ability of the inventory is above its original cost the

companies should reports their inventory value with LCNV method.

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The required return on the stock of Moe's Pizza is 10.4 percent and aftertax required return on the company's debt is 3.28 perce

Katarina [22]

Answer:

WACC - new project = 6.408% rounded off to 6.41%

Explanation:

The WACC or weighted average cost of capital is the cost of a firm's capital structure. The capital structure can consist of one or more of the following components namely debt, preferred stock and common equity. The WACC is calculated as follows,

WACC = wD * rD * (1 - tax rate) + wP * rP + wE * rE

Where,

w represents the weight of each component
r represents the cost of each component
D, P and E represents debt, preferred stock and common equity
rD * (1 - tax rate) is the after tax cost of debt

We first need to calculate the WACC of the company and then adjust it for the new project.

WACC = 35% * 3.28% + 65% * 10.4%

WACC = 7.908%

As the new project is less risky and has an adjustment factor of -1.5%, the required rate of return for the new project will be,

WACC - new project = 7.908% - 1.5%

WACC - new project = 6.408% rounded off to 6.41%

4 0

2 years ago

Following accounts, the one that normally has a credit balance is:

SashulF [63]

Answer: B.Sales Salaries Expense.

Hopefully this helps:) Mark me the brainliest:)!!

8 0

2 years ago

Which of the following capital asset-related transactions would most likely be accounted for through a Capital Projects Fund? A

saw5 [17]

Answer:

The correct answer is C. Construction of a general government office building.

Explanation:

A capital project refers to investments made in order to generate future profits on sale or rent and which are shared among several project investors. The construction of an office building would be classified within this group, since the utility will be given from the lease of the construction for the execution of activities typical of the general government. Within the investment structure, the usufruct of the real property is conceived in order to recover the investments made within a period of time. These projects generally involve banks and entities with a high level of capital that create trust funds that separately manage the accounts of these associations.

7 0

2 years ago

Under a condition of ____, there is no doubt about the factual basis of a decision and its outcomes. Select one: a. managed unce

Alex Ar [27]

Answer: e. Certainly

Explanation: The condition of certainty is that where all possible results that can generate a decision are kept visible, this condition facilitates the moment of decision making and provides a manager with greater security of his actions.

Example: Company A is certain that the market has dropped 10% due to market studies that reveal that there has been a decline. However, company B did not carry out this investigation, which is why it is taken by surprise the situation.

3 0

3 years ago

TPW, a calendar year taxpayer, sold land with a $549,000 tax basis for $820,000 in February. The purchaser paid $89,000 cash at

Lena [83]

Answer:

a. Difference between book income and tax income = $229,505.73

b. The difference between book income and tax income is favorable.

c. Deferred tax liability = $48,196.20

Explanation:

a. Compute the difference between TPW's book and tax income resulting from the installment sale method.

This can be computed as follows:

Amount realized on sale of land = Cash paid by purchaser + Value of interest- bearing note given by the purchaser = $89,000 + $731,000 = $820,000

Adjusted tax basis in land = $549,000

Book income = Amount realized on sale of land - adjusted tax basis in hand = $820,000 - $549,000 = $271,000

Gross profit percent = Book income / Amount realized on sale of land = $271,000 / $820,000 = 0.3305, or 33.05%

Cash received on sale of land = Cash paid by purchaser + Principal payment received in August = $89,000 + $36,550 = $125,550

Tax income =Cash received on sale of land * Gross profit percent = $125,550 * 33.05% = $41,494.28

Difference between book income and tax income = Book income - Tax income = $271,000 - $41,494.28 = $229,505.73

b. Is this difference favorable or unfavorable?

Since the book income greater than the tax income, this implies that the difference between book income and tax income is favorable.

c. Using a 21 percent tax rate, compute PTR's deferred tax asset or liability (identify which) resulting from the book/tax difference.

Deferred tax liability = Difference between book income and tax income * 21% = $229,505.73 * 21% = $48,196.20

4 0

2 years ago