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Vladimir [108]
3 years ago
12

Suppose an owner pays $500 million to purchase a hockey team that earns operating profits of $50 million per year. The new owner

claims that $200 million of this prices is for the players, which he can depreciate using straight-line depreciation in five years. If the team pays corporate profit taxes of 40 percent, how much does the depreciation of the players save the owner
Business
1 answer:
V125BC [204]3 years ago
6 0

Answer:

The company will save 16 million dollar per year (till 5 years).

Explanation:

The saving can be easily calculated by subtracting tax paid after charging depreciation from tax paid if no depreciation is charge.

Tax Paid if no depreciation is charge

 = $ 50 * 40% = $ 20 Million -A

Tax Paid if depreciation is charge

 = ($ 50- $ 40") * 40% = $ 4 Million -B

" 200/5 =40

Tax saving = A-B = $ 16 Million per year

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A service auditor's report on a service center should include a(n) :A. Detailed description of the service center's internal con
SashulF [63]

Answer:

The answer is letter A.

Explanation:

Detailed description of the service center's internal control.

4 0
3 years ago
Write an e-mail to a client describing situations in which the partnership entity form might be more advantageous (or disadvanta
murzikaleks [220]

<u>Explanation:</u>

Structure and Formation of Corporation and Partnership:

  • Corporation is a independent legal entity whereas partnership in which two or more partners share ownership.
  • The formation of partnership entity requires fulfillment of lesser formalities than corporation.

Powers:

  • A partnership entity can do anything which the partners agree to do and there is no limit to the activities.
  • The powers of the shareholders are limited unlike the partnership entity.

Management:

  • Every member of a partnership entity may take part in the management.
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5 0
3 years ago
A work center uses kanban containers that hold 200 parts. To produce enough parts to fill a container, 60 minutes of setup plus
slamgirl [31]

Answer:

9 containers

Explanation:

Data given

Container holds (capacity) = 200 units

Demand rate per minute = 10 units

The computation of number of containers needed is shown below:-

Time to fill container = Setup time + Processing time

= 60 + 120

= 180 minutes

Number of containers (n) = (Demand × Time to fill container) ÷ Capacity of the container

= (10 × 180) ÷ 200

= 1,800 ÷ 200

= 9 containers

Therefore for computing the number of containers we simply applied the above formula.

5 0
3 years ago
Bingerton Industries uses a perpetual inventory system. The company began the year with inventory of $77,000. Purchases of inven
SVETLANKA909090 [29]

Answer:

Refer explanation

Explanation:

1. Purchase of Inventory ($302000)

This transaction has occurred on account which means that payment was not made immediately but would be made at a future date, thus a creditor to the business.

Debit : Purchases account : $302000

Credit : Accounts Payables account : $302000

2. Sale of inventory ($504000)

The sale of inventory requires two separate transactions. The sale is accounted and along with this, the amount of inventory sold would also have to be accounted as an asset reduction.

A. To reduce inventory:

Debit : Cost of Sales account : $327000

Credit : Inventory account : $327000

B. Record the sale:

Debit : Accounts Receivables account : $504000

Credit : Sales account : $504000

This too is a sale on account which means that a debtor has been incurred who will pay for the sale at a later date.

3 0
3 years ago
Campbell Transport Company divides its operations into four divisions. A recent income statement for its West Division follows.
Leona [35]

Answer:

Explanation:

1) Revenue  $540,000

less: Salaries for drivers  (390,000)

Fuel expense  (54,000)

insurance  (74,000)

Division line  (44,000)

Net loss  (22,000)

If division is eliminated the income would increase by $22,000

So it should be eliminated.

2) Decrease in income = $600,000 - ($540,000+$22,000)

= $38,000

3) What is the minimum amount of revenue required = 600,000 - 38,000 = $562,000

8 0
3 years ago
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