Answer:
$508,000
Explanation:
Outstanding Receivables as on Dec 31 = $6,500,000
Required uncollectible receivables = 8% of $6,500,000 = $520,000
Less Opening allowance for doubtful debts <u>$12,000
</u>
Allowance to be recognized this year <u>$508,000 </u>
Answer:
Results are below.
Explanation:
<u>First, we will determine the net income for tax purposes:</u>
Sales= 800,000
Expenses other than depreciation= (350,000)
Gross profit= 450,000
Depreciation= (200,000)
EBT= 250,000
Tax= (250,000*0.34)= (85,000)
Depreciation= 200,000
Net income= 365,000
<u>Now, for reporting purposes:</u>
Gross profit= 450,000
Depreciation= (130,000)
EBT= 320,000
Tax= (320,000*0.34)= (108,800)
Depreciation= 130,000
Net income= 341,200
Answer:
Explanation:
Sale Value 1500000
less:Adjusted basis (1000000-89765) 910235
a)Gain recognized 589765
b) in case of sale of real property,cooperates are subject to section 291 to recapture.According to section 291,cooperates taxpayers to recaptures 20% of the lessor of the gain recognized or accumulated depreciation taken.
The recaptured gain is taxed as ordinary gain.
The remaining gain is taxed as section 1231 gain.
Section 1231 Gain (589765-17953) 571812
Section 1250 recapture due to section 291 (89765×20%) 17953
Answer:
$1.45
Explanation:
Data provided in the question
Variable cost per component = $1.45
Full cost = $1.91
Selling price per component = $4.95
By considering the above information, the lowest price that would be accepted for the component is equal to the variable cost per unit i.e $1.91 and plus the full cost includes both the variable and fixed cost plus the fixed cost would be recovered by normal sale also
So in this case we only considered the variable cost per component
Answer:
Explanation:
Future value after 24 months = 1200
present value = 1000
Let monthly rate of interest = r
1000 = 1200/( 1+r )²⁴
( 1+r )²⁴ = 1200/1000
( 1+r )²⁴ = 1.2
taking log on both sides
24 log( 1+r ) = log 1.2
24 log( 1+r ) = .07918
log( 1+r ) = .003299
( 1+r ) = 1.007625
r = .007625
monthly rate of interest in percent = .7625%
II Option
Future value after 24 months = 1220
present value = 1020 - 20 = 1000
Let monthly rate of interest = r
1000 = 1220/( 1+r )²⁴
( 1+r )²⁴ = 1220/1000
( 1+r )²⁴ = 1.22
taking log on both sides
24 log( 1+r ) = log 1.22
24 log( 1+r ) = .086359
log( 1+r ) = .003598
( 1+r ) = 1.008319
r = .008319
monthly rate of interest in percent = .8319%
b )
Effective annual rate of uncle = (1.007625)¹² -1
= 1.09543 - 1 = .09543
In percent = 9.543 %
Effective annual rate of greedy friend = ( 1.008319)¹² -1
= 1.1045 -1
= 10.45 %
c ) The first one is cheaper so it is preferable.
