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Rufina [12.5K]
3 years ago
15

Bigham Corporation, an accrual basis calendar year taxpayer, sells its services under 12- and 24-month contracts. The corporatio

n provides services to each customer every month. On July 1, 2020, Bigham sold the following customer contracts: Length of contract Total Proceeds 12 months $44,800 24 months $89,600 Determine the income to be recognized in taxable income in 2020 and 2021.
Business
1 answer:
Andreas93 [3]3 years ago
6 0

Answer:

12 months

2020 $22,400

2021 $22,400

24 months

2020 $22,400

2021 $44,800

Explanation:

Calculation to Determine the income to be recognized in taxable income in 2020 and 2021.

Length of Contract

12 months

2020 Income=$44,800 * 6/12=$22,400

2021 Income=$44,800 * 6/12=$22,400

24 months

2020 Income=$89,600 *6/24=$22,400

2021 Income =$89,600 *12/24=$44,800

Therefore the income to be recognized in taxable income in 2020 and 2021 will be:

12 months

2020 $22,400

2021 $22,400

24 months

2020 $22,400

2021 $44,800

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Stately Crafters is a custom manufacturer of hand-crafted furniture. The company has 101 locations throughout the country and re
Angelina_Jolie [31]

Answer: (D) Organic

Explanation:

Organic approach is one of the type of organizational design or structure that helps in providing the various types of effective characteristics so that the organization are able to adapting the dynamic environment easily.

The organic approach provide the less complexity in the organizational design that basically relies on the decentralized decisions and also helps in meet the effective products based on the customer requirement.

 According to the question, the Stately crafters is one of the manufacturing company that is located in the 101 locations in the country and the organic approach helps in making the various types of organisational decisions.    

 Therefore, Option (D) is correct answer.

 

4 0
3 years ago
Common Stockholders' Profitability Analysis A company reports the following:
AVprozaik [17]

Answer:

(A) Rate earned on stockholder's equity=15%

(B) Rate earned on common stockhloder's equity= 16%

Explanation:

A company reports the following profitability analysis

Net income of $375,000

Preferred dividend of $75,000

Average stockhloder's equity of $2,500,000

Average common stockhloder's equity of $1,875,000

(A) The rate earned on stockholder's equity can be calculated as follows

= Net income/Average stockholders equity

= $375,000/$2,500,000

= 0.15×100

= 15%

(B) The rate earned on common stock holder's equity can be calculated as follows

= Net income-Preferred dividend/Average common equity

= $375,000-$75,000/$1,875,000

= $300,000/$1,875,000

= 0.16×100

= 16%

Hence the rate earned on stockholder's equity and common stockhloder's equity is 15% and 16% respectively.

4 0
4 years ago
The Fabricating Department started the current month with a beginning Work in Process inventory of $11,600. During the month, it
raketka [301]

Answer: $18,280

Explanation:

Ending inventory for fabricating department = Beginning Work in Process + Direct materials + Direct labor + Factory overhead - Inventory transferred out of department

= 11,600 + 77,600 + 25,600 + (80% * 25,600) - 117,000

= 11,600 + 77,600 + 25,600 + 20,480 - 117,000

= $18,280

6 0
3 years ago
Patterson Co.’s Depreciation Expense is $20,200 and the beginning and ending accumulated depreciation balances are $150,100 and
andreev551 [17]

Answer: $0

Explanation:

Fron the question, we are informed that Patterson Co.’s Depreciation Expense is $20,200 and the beginning and ending accumulated depreciation balances are $150,100 and $155,100, respectively.

The cash paid for depreciation will be $0. It should be noted that depreciation has to do with the ear and tear of an asset because its usage therefore no cash will be paid for depreciation.

6 0
3 years ago
A 10-year annual payment corporate bond has a market price of $1,050. It pays annual interest of $100 and its required rate of r
bija089 [108]

Answer:

bond under priced is  $14.18

Explanation:

given data

market price = $1,050

annual interest = $100

rate of return = 9 percent

time period = 10 year

solution

we get here bond mis priced so for we get first theoretical Price of the bond that is

theoretical Price of the bond  = annual interest × \frac{1- (1+r)^{-t }}{r} +  \frac{1000}{(1+r)^t}  ........1

theoretical Price of the bond  = 100 × \frac{1- (1+0.09)^t }{-10} + \frac{1000}{(1+0.09)^{10}}    

theoretical Price of the bond  = $1064.18

but actual Price is $1050

so here bond is under priced as  $1064.18 - $1050

bond under priced is  $14.18

6 0
3 years ago
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