Answer:
Availability Bias(Amber)
Representativeness Bias(Logan)
Sunk-Cost Bias(Katrina)
Anchoring and Adjustment Bias(Sue)
Confirmation Bias(Mike)
Overconfidence Bias(Bill)
Hindsight Bias(Kathy)
Framing Bias(Allison)
Escalation of Commitment Bias(Patrick)
Explanation:
Bias can as well be regarded as cognitive bias, it can be explained as tendency that comes in when making decisions or taking actions in ways that are illogical.It should be noted Decision making can often be biased as well as flawed process.
The fundamental decision making bias are been listed below as;
1)Availability Bias
2)Representativeness Bias
3)Sunk-Cost BiasAnchoring
3)Adjustment Bias
4)Confirmation Bias
5)Overconfidence Bias
6)Hindsight Bias
7)Framing Bias
8)Escalation of Commitment Bias
Quantitative Problem: Jenna is a single taxpayer. During 2018, she earned wages of $113,000. She doesn't itemize deductions, so she will take the standard deduction to calculate 2018 taxable income. In addition, during the year she sold common stock that she had owned for five years for a net profit of $5,200. How much does Jenna owe to the IRS for taxes
Solution :
Item Amount
Income $113,000
Personal exemption for one $ 4,050
Standard deduction $ 6,350
Taxable income $102,600
Therefore the taxable income is $102,600.
Now the tax payable on the taxable income is given by :
Marginal tax rate Amount brackets
10% $0 - $ 9,325
15% $ 9,326 - $ 37,950
25% $ 37,951 -$ 91,900
28% $ 91,901 - $ 191,650
Now according to the above taxable slab, the amount of tax on the wages earned by Jenna is :
Tax payable = [tex]$= (0.1 \times 9325)+(0.15 \times (37950 - 9325))+(0.25 \times (91900 - 37950))+(0.28 \times (102600-91900))$[/tex][tex]$= (0.1 \times 9325)+(0.15 \times 28625)+(0.25 \times 53950)+(0.28 \times 10700)$[/tex]
= 932.5 + 4293.75 + 13487.50 + 2996
= $ 21,709.75
There is also a long term capital gain of $ 5,200 that is earned by selling the common stock.
Now as per IRS, the capital gain of a long term tax percentage for an individual single filer is in 28% tax slab category is 15%.
Therefore the tax on the capital gain of $ 5,200 is = 0.15 x 5200
= $780
Thus the total tax payable by Jenna is = $ 21,709.75 + $ 780
= $ 22,489.75
The management of Ballard MicroBrew is considering the purchase of an automated bottling machine for $61,000. The machine would replace an old piece of equipment that costs $15,000 per year to operate. The new machine would cost $6,000 per year to operate. The old machine currently in use could be sold now for a salvage value of $20,000. The new machine would have a useful life of 10 years with no salvage value. Required: 1. What is the annual depreciation expense associated with the new bottling machine
Answer:
1. $6,100
2. $3,000
3.$41,000
4.7.3%
Explanation:
1. Calculation for What is the annual depreciation expense associated with the new bottling machine
Depreciation expense= 61,000/10
Depreciation expense=$6,100
2. Calculation for What is the annual incremental net operating income provided by the new bottling machine
Reduction in Operating costs 9,000 ($15,000-$6,000)
Less: Depreciation expense $6000
Incremental net operating income $3,000
3. Calculation for What is the amount of the initial investment
Purchase cost $61,000
Less: Salvage value of old machine $20,000
Initial Investment $41,000
4. Calculation for What is the simple rate of return on the new bottling machine
Incremental net operating income 3000
÷ Initial Investment 41000
Simple rate of return 7.3%
(3,000÷41,000)
The legal theory of contributory negligence:
a. is in effect in the majority of states throughout the nation.
b. means that, even assuming the defendant is negligent, if the plaintiff is even slightly negligent, the plaintiff recovers nothing.
c. allows the negligent plaintiff to recover if he was responsible for less than 50 percent of his injury.
d. has been criticized as rewarding a plaintiff for being careless.
Answer:
b. means that, even assuming the defendant is negligent, if the plaintiff is even slightly negligent, the plaintiff recovers nothing.
Explanation:
Contributive negligence is a tort in law that allows the defender in a case to completely prevent a plaintiff from getting any recovery in a case.
This occurs if the defender can prove the plaintiff is negligent resulting in their own injury. That is self injury.
On the other hand comparative negligence allows the plaintiff recover a certain percentage in case of negligence that affects himself. For example if plaintiff was 10% negligent then they lose 10% of the amount they were to recover.
So contributory negligence means that, even assuming the defendant is negligent, if the plaintiff is even slightly negligent, the plaintiff recovers nothing.
Suman said that, "she didn't understand the
direct and indirect speech
Explanation:
Indirect speech, also known as reported speech or indirect discourse (US), is a means of expressing the content of statements, questions or other utterances, without quoting them explicitly as is done in direct speech. For example, He said "I'm coming" is direct speech, whereas He said (that) he was coming is indirect speech. Indirect speech should not be confused with indirect speech acts.
Today manufacturers are relying more heavily on developing an MRP system for purchasing. the bidding process to obtain the lowest price. developing close relationships with just a few suppliers to secure affordable prices. many suppliers to keep their leverage.
Answer:
many suppliers to keep their leverage.
Explanation:
Recently, a group of university students decided to incorporate for the purposes of selling a process to recycle the waste product from manufacturing cheese. Some of the initial costs involved were legal fees and office expenses incurred in starting the business, state incorporation fees, and stamp taxes. One student wishes to charge these costs against revenue in the current period. Another wishes to defer these costs and amortize them in the future. Which student is correct
Answer:
The student wishing to defer these costs and amortize them in the future.
Explanation:
Indeed, according to standard regulatory requirements, all the initial costs associated with incorporating a business cannot be deducted all at once in the first year of operation.
However, these costs are spread over a long period of time. And one way to do this is to amortize them in the future. Therefore, the second student deferring cost is correct.
Question
Felicia Rashad Corporation has pretax financial income (or loss) equal to taxable income (or loss) from 2006 through 2014 as follows.
Income (Loss) Tax Rate
2006 $29,000 30 %
2007 40,000 30 %
2008 17,000 35 %
2009 48,000 50 %
2010 (150,000 ) 40 %
2011 90,000 40 %
2012 30,000 40 %
2013 105,000 40 %
2014 (60,000) 45 %
Pretax financial income (loss) and taxable income (loss) were the same for all years since Rashad has been in business. Assume the carryback provision is employed for net operating losses. In recording the benefits of a loss carryforward, assume that it is more likely than not that the related benefits will be realized.
a) What entries for income taxes should be recorded for 2010? .
b) Indicate what the income tax expense portion of the income statement for 2010 should look like. Assume all income (loss) relates to continuing operations.
c)What entry for income taxes should be recorded in 2011?
d) How should the income tax expense section of the income statement for 2011 appear?
e) what entry for income taxes should be recorded in 2014
f) how should the income tax expense section of the statement for 2104 appear to be ?
?
Answer:
A. Dr Deferred Tax Asset 60,000.00
Cr Deferred Tax 60,000.00
B. Income Statement (Partial)
Current Tax -
Deferred Tax (60,000.00)
Total Tax (60,000.00)
C.Dr Deferred Tax Asset 36,000
Cr Deferred Tax 36,000
D. Income Statement (Partial)
Current Tax -
Deferred Tax 36,000
Total Tax 36,000
E. Dr Deferred Tax Asset 27,000
Cr Deferred Tax 27,000
F. Income Statement (Partial)
Current Tax -
Deferred Tax 27,000
Total Tax 27,000
Explanation:
A. Calculation for what the entries for income taxes should be recorded for 2010
Entries for Income tax for 2010
Dr Deferred Tax Asset 60,000.00
Cr Deferred Tax 60,000.00
2010 (150,000 *40 %)
(To record timing difference of carry forward losses)
b) Indication for what the income tax expense portion of the income statement for 2010 should look like. :
Felicia Rashad Corporation
Income Statement (Partial)
Current Tax -
Deferred Tax (60,000.00)
Total Tax (60,000.00)
c) Calculation for what the entries for income taxes should be recorded for 2011
Dr Deferred Tax Asset 36,000
Cr Deferred Tax 36,000
2011 (90,000* 40 %)
(To record deferred tax asset utilization)
d) Income tax expense section of the income statement for 2011 appear
Felicia Rashad Corporation
Income Statement (Partial)
Current Tax -
Deferred Tax 36,000
Total Tax 36,000
e) Calculation for what the entries for income taxes should be recorded for 2014
Dr Deferred Tax Asset 27,000
Cr Deferred Tax 27,000
2014 (60,000*45 %)
(To record deferred tax asset utilization)
f) Income tax expense section of the income statement for 2014 appear
Felicia Rashad Corporation
Income Statement (Partial)
Current Tax -
Deferred Tax 27,000
Total Tax 27,000
Cost of goods manufactured in a manufacturing company is analogous to
Swifty Company showed the following balances at the end of its first year: Cash $3930 Prepaid insurance 6910 Accounts receivable 4990 Accounts payable 3960 Notes payable 5930 Owner’s Capital 2090 Owner’s Drawings 960 Revenues 32100 Expenses 24800 What did Swifty Company show as total credits on its trial balance? a. $44080 b. $49070 c. $45040 d. $9390
Answer:
$44,080
Explanation:
The total credit for swifty company can be calculated as follows
Account payable + notes payable + common stock + revenue
= 3960 + 5930 + 2090 + 32100
= 44,080
Hence the total credits is $44,080
Desert, Inc. has year-end account balances as of December 31, 2020 of Sales Revenue $907,000; Interest Revenue $24,000; Cost of Goods Sold $593,000; Administrative Expenses $188,000; Income Tax Expense $31,000; Dividends $18,000, Unrealized Pension Liability Adjustments of $21,500 (dr) and a correction of an error in recording Depreciation Expense for 2018 of $12,000 (dr).
To prepare the year-end closing entry required to close the Income Summary account, Desert would record a:_________
a. Debit to Net Income for $107.000.
b. Debit to Income Summary for $119,000
c. Debit to Retained Earnings for $89,000
d. Debit to Income Summary for $67,500
Answer:
Dr to income summary for $119,000
Explanation:
The year end closing entry to required to close the income entry would be ;
Sales revenue. Dr $907,000
Interest revenue Dr $24,000
Income summary Cr $931,000
Income summary Dr $812,000
Cost of goods sold Cr $593,000
Administrative expenses Cr $188,000
Income tax expense Cr $31,000
*Income summary Dr. $119,000
Retained earnings Cr $119,000
Retained earnings. Dr $18,000
Dividend Cr $18,000
USAco, a domestic corporation, manufactures widgets for sale worldwide. In year 2020, USAco had $10 million of net income related to sales of products it manufactures in the US, of which 3 million relates to sales to customers outside the US. USACO also owns a factory, which it uses to produce the above income, and which has an average adjusted U.S. tax basis of $40 million (taking into account the straight-line depreciation method). As a result of these activities, USACo will be allowed a Foreign Derived Intangible Income ("FDII") deduction of _______________
Answer:
USAco
As a result of these activities, USACo will be allowed a Foreign Derived Intangible Income ("FDII") deduction of _______________
$236,250.
Explanation:
a) Data and Calculations
Net income = $10 million
Export sales income = $3 million
Normal tax on $3 million at 21% = $630,000
FDII 13.125% tax on $3 million = $393,750
Difference = $236,250
b) A foreign derived intangible income (FDII) arises from the ownership, sale, or exchange of intangible property, patents, copyrights, trademarks, trade names, or other products tied to intangible assets by USACo, which entitles it to make a tax deduction of the calculated amount or to be taxed at a reduced tax rate of 13.125% instead of the normal 21% corporate tax rate. The FDII is aimed at encouraging US-based corporations to export more goods and services while locating more intangible assets in the US.
Powell Panther Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) 20192018 Sales$3,220.0$2,800.0 Operating costs excluding depreciation and amortization2,576.02,380.0 EBITDA$644.0$420.0 Depreciation and amortization90.078.0 Earnings before interest and taxes (EBIT)$554.0$342.0 Interest70.861.6 Earnings before taxes (EBT)$483.2$280.4 Taxes (25%)193.3112.2 Net income$289.9$168.2 Common dividends$260.9$134.6 Powell Panther Corporation: Balance Sheets as of December 31 (Millions of Dollars) 20192018 Assets Cash and equivalents$36.0$31.0 Accounts receivable370.0308.0 Inventories678.0616.0 Total current assets$1,084.0$955.0 Net plant and equipment902.0784.0 Total assets$1,986.0$1,739.0 Liabilities and Equity Accounts payable$315.0$252.0 Accruals269.0224.0 Notes payable64.456.0 Total current liabilities$648.4$532.0 Long-term bonds644.0560.0 Total liabilities$1,292.4$1,092.0 Common stock614.2596.6 Retained earnings79.450.4 Common equity$693.6$647.0 Total liabilities and equity$1,986.0$1,739.0 Write out your answers completely. For example, 25 million should be entered as 25,000,000. Round your answers to the nearest dollar, if necessary. Negative values, if any, should be indicated by a minus sign. What was net operating working capital for 2018 and 2019
Answer:
Calculation of net operating working capital
Particulars 2018 2019
Current asset A $955 million $1,084 million
Current liability B $532.0 million $648.4 million
Net working capital A-B $423 million $435.6 million
Steelweld, a car parts manufacturer, pays employees a higher hourly rate as they learn to master more parts of the work process. Employees earn $10 per hour when they are hired and they can earn up to $20 per hour if they master all 12 work units in the production process. What is most likely a benefit Steelweld is trying to achieve with this reward system?
Answer:
The improvement of workforce flexibility
Explanation:
The work force flexibility may be defined as the strategy of the responding to changing circumstances as well as expectations. It lays emphasizes on the flexibility and the willingness to adapt to change. The employees who approach their work with a flexible mindset are highly valued by the employers.
In the context, Steelweld company pays their employees at a higher hourly rate when they learn to master more work skills. The employees are paid much higher when they master all the 12 work units than they were hired. By doing this, the Steelweld company is trying to benefit and improve the workforce flexibility in their company.
The following information is related to Splish Company for 2020.
Retained earnings balance, January 1, 2020 $1,332,800
Sales Revenue 34,000,000
Cost of goods sold 21,760,000
Interest revenue 95,200
Selling and administrative expenses 6,392,000
Write-off of goodwill 1,115,200
Income taxes for 2020 1,691,840
Gain on the sale of investments 149,600
Loss due to flood damage 530,400
Loss on the disposition of the wholesale division (net of tax) 598,400
Loss on operations of the wholesale division (net of tax) 122,400
Dividends declared on common stock 340,000
Dividends declared on preferred stock 108,800
Splish Company decided to discontinue its entire wholesale operations (considered a discontinued operation) and to retain its manufacturing operations. On September 15, Splish sold the wholesale operations to Rogers Company. During 2020, there were 500,000 shares of common stock outstanding all year.
Required:
Prepare a multiple—step income statement.
Answer:
Net income is $2,034,560.
Explanation:
The multiple-step income statement refers to an income statement that segregates operating revenues and operating expenses of an organisation from its nonoperating revenues, nonoperating expenses, gains, and losses. In addition, gross profit which is net sales revenue minus the cost of goods sold.
The multiple-step income statement is an alternative to the single-step income statement which reports uses just one equation to calculate profits by deducting total revenue from total expenses from segregating them.
The multiple step income statement of Splish Company for 2020 will look as follows:
Splish Company
Income Statement
For the Year Ended December 31, 2020
Particulars $ $
Sales Revenue 34,000,000
Cost of goods sold (21,760,000)
Gross profit 12,240,000
Selling and administrative expenses (6,392,000)
Income from operation 5,848,000
Other revenues and gains
Interest revenue 95,200
Gain on the sale of investments 149,600
Total other revenues and gains 244,800
6,092,800
Other expenses and losses
Write-off of goodwill (1,115,200)
Loss due to flood damage (530,400)
Total other expenses and losses (1,645,600)
Income from continuing op. b4 tax 4,447,200
Income taxes (1,691,840)
Income from continuing operation 2,755,360
Discontinued operation
Loss on disposal (net of tax) (598,400)
Loss on operations (net of tax) (122,400)
(720,800)
Net income 2,034,560
​"A permanent increase in government purchases has a larger effect than a temporary increase of the same​ amount." Use the​ saving-investment diagram to evaluate this​ statement, focusing on effects on​ consumption, investment, and the real interest rate for a fixed level of output. ​(​Hint: The permanent increase in government purchases implies larger increases in current and future taxes​.)
Answer:
here
Explanation:
According to economists, all humans have their own "rational self-interest." What does this mean?
A.) They want to help others rather than help themselves.
B.) They will only make rational and logical decisions about purchases.
C.) They want to benefit themselves as much as possible.
D.) They will only make a purchase if it is involving their top three interests.
They want to benefit themselves as much as possible.
The most recent financial statements for Live Co. are shown here:
Income Statement Balance Sheet
Sales $4,800 Current assets $5,102 Debt $10,201
Costs
3,168
Fixed assets 12,491 Equity 7,392
Taxable income $1,632 Total
$17,593
Total
$17,593
Taxes (34%) 555
Net income
$1,077
Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 30 percent dividend payout ratio. No external equity financing is possible.
Required:
What is the internal growth rate?
A. 4.48%
B. 4.58%
C. 4.38%
D. 11.36%
E. 1.87%
Answer:
The answer is "Option A".
Explanation:
Using formula:
[tex]\text{Equity Return} = \frac{ \text{Net Income}}{ \text{Total Assets}} \times 100[/tex]
[tex]= \frac{1,077}{17,593} \times 100 \\\\= 0.0612175297 \times 100\\\\= 6.12175297\\\\=6.12 \%[/tex]
[tex]\text{Calculating the Plowback Ratio} \ (b) = 1- \text{Dividend Payout Ratio}[/tex]
[tex]= 1-0.30 \\\\ = 0.70[/tex]
[tex]\text{Internal Growth Rate} = \frac{ROA \times b }{(1-ROA \times b)} \\\\[/tex]
[tex]= \frac{0.0612 \times 0.70}{(1-0.0612\times 0.70)} \\\\= \frac{0.04284}{0.95716} \\\\ =0.044754073 \\\\ =4.47\%[/tex]
sally borrowed $1000 from her friend monique two years ago. their arrangement required sally to repay $250 each year for the subsequent four years. Today with two paymewnts remaining on the loan, Sally offers to repay the loan with a single payment of $475. Assuming no change in interest rates throughout the entire time, should monique accept the signle $475 payment today, why or why not
Answer:
a
Explanation:
Here are the options to this question :
A. yes, 475 is more than the PV of the two remaining payments
B. More information is needed to decide
C. Monique is indifferent between the options, the PVs are equivalent
D. No, the PV of the remaining two payments is more than 475
We have to determine the present value of the remaining two payments and compare the options
Present value is the sum of discounted cash flows
Present value can be calculated using a financial calculator
Cash flow in year 1 = 0
Cash flow in year 2 = 0
Cash flow in year 3 = 250
Cash flow in year 4 = 250
I = 2%
PV = $466.54
$475 is greater than $466.54. Therefore, she should accept the single $475 payment
To find the PV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Dawn, a sole proprietor, was engaged in a service business and reported her income on a cash basis. In 2018, she incorporated her business by transferring the assets of the business to a new corporation in return for all the stock in the corporation plus the corporation’s assumption of the liabilities of her proprietorship. All the receivables and the unpaid trade payables were transferred to the new corporation. The assets of the proprietorship had total basis of $125,000 and total fair market value of $300,000. The trade accounts payable assumed by the corporation totaled $35,000, and were for services rendered by third parties directly to customers of the business under Dawn’s supervision. The corporation also assumed a note payable to the bank, in the amount of $95,000. The note was issued for a loan used to purchase computers and other business equipment used in the business and transferred to the corporation.
a. Dawn has a taxable gain on the transfer of $5,000.
b. Dawn has a basis of $20,000 in the stock she receives.
c. Dawn has a basis of $10,000 in the stock she receives.
d. Dawn has a basis of $30,000 in the stock she receives.
e. Dawn has a basis of $235,000 in the stock she receives.
Answer:
d. Dawn has a basis of $30,000 in the stock she receives.
Explanation:
The computation is shown below:
= Total assets basis - total liabilities in terms of note payable
= $125,000 - $95,000
= $30,000
So Dawn has the basis of $30,000 in terms of the stock she received
Therefore the option d is correct
Solivan Corp. incurred the following costs during the current year:
Construction of preproduction prototypes $180,000
Testing in search of process alternatives 110,000
Design of tools, jigs, molds, and dies involving new technology 115,000
Engineering follow-through in an early phase of commercial production 80,000
Seasonal or other periodic changes to existing products 105,000
In its income statement, Solivan should report research and development expense of:________
a. $295,000
b. $370,000
c. $405,000
d. $375,000
Answer:
c. $405,000
Explanation:
Calculation of R$D Expenses to be report in Income statement
Construction of pre-production prototypes $180,000
Testing in search of process alternatives $110,000
Design of tools, jigs, molds, and dies $115,000
involving new technology
Total R&D Expenses $405,000
Note: Engineering follow-through in an early phase of commercial production & Seasonal or other periodic changes to existing products are excluded from calculation of Research and Development Expenses.
On January 1, 2020, Bridgeport Corporation issued $3,740,000 of 10-year, 8% convertible debentures at 102. Interest is to be paid semiannually on June 30 and December 31. Each $1,000 debenture can be converted into 8 shares of Bridgeport Corporation $100 par value common stock after December 31, 2021. On January 1, 2022, $374,000 of debentures are converted into common stock, which is then selling at $111. An additional $374,000 of debentures are converted on March 31, 2022. The market price of the common stock is then $116. Accrued interest at March 31 will be paid on the next interest date. Bond premium is amortized on a straight-line basis. Make the necessary journal entries for: (a) December 31, 2021. (c) March 31, 2022. (b) January 1, 2022. (d) June 30, 2022.
Answer:
Bridgeport Corporation
Journal Entries:
(a) December 31, 2021.
Debit Interest on Debentures $149,600
Credit Cash $149,600
To record the interest expense and payment for the six months.
Debit Debentures Premium $3,740
Credit Interest on Debentures $3,740
To record the amortization of the debentures premium.
(b) January 1, 2022.
Debit Debenture $374,000
Credit Common Stock $299,200
Credit APIC $74,800
To record the conversion of debentures to shares.
(c) March 31, 2022.
Debit Debenture $374,000
Credit Common Stock $299,200
Credit APIC $74,800
To record the conversion of debentures to shares.
Debit Interest on Debentures $67,320
Credit Interest Payable $67,320
To accrue interest for the quarter.
Debit Debentures Premium $1,870
Credit Interest on Debentures $1,870
To record the amortization of the debentures premium for the quarter.
(d) June 30, 2022.
Debit Interest on Debentures $59,840
Credit Interest payable $59,840
To accrue interest for the quarter.
Debit Debentures Premium $1,870
Credit Interest on Debentures $1,870
To record the amortization of the debentures premium for the quarter.
Debit Interest Payable $127,160
Credit Cash $127,160
To record payment of interest for the six months.
Explanation:
a) Data and Calculations:
Issue of 10-year 8% Convertible Debentures at 102 = $3,814,800 (Cash)
Debenture premium $74,800
Half-yearly premium amortization = $74,800/20 = $3,740
Face value = $3,740,000
b) Interest on Debenture = $3,740,000 * 8% * 1/2 = $149,600
c) $374,000 debentures converted into 8 shares for every $1,000.
= $374,000/1,000 * 8 = 2,992 shares at $100 par value
d) Interest on Debentures ($3,740,000 - $374,000) * 8% * 1/4
= $3,366,000 * 8% * 1/4 = $67,320
Plus
$3,366,000 - $374,000 * 8% * 1/4 = $59,840
Total interest = $127,160
Making a financial transaction based on information not available to other
investors is known as
A. Sarbanes-Oxley
B. fair disclosure
C. insider trading
D. selling or buying short
SUBMIT
Answer:c.....
Explanation:a p e x
Making a financial transaction based on information not available to other investors is known as insider trading. Thus the correct option is C.
What is a financial transaction?A financial transaction is an arrangement for the exchange of commodities or services between a buyer and a seller. The financial account keeps systematic track of all financial transactions and summarises them.
Insider trading is the act of workers dealing in the stock or other securities of a publicly traded firm while in possession of substantial, non-public information on the company.
Insider trading is the act of buying or selling a financial instrument based on the knowledge that is not typically available to investors. Sales are transactions in which a buyer exchanges goods and services with a seller in return for cash or credit.
Therefore, option C is appropriate.
Learn more about Insider trading, here:
https://brainly.com/question/14031275
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Amy and Brian were investigating the acquisition of a tax accounting business, Bottom Line Inc. (BLI). As part of their discussions with the sole shareholder of the corporation, Ernesto Young, they examined the company's tax accounting balance sheet. The relevant information is summarized as follows:
FMV Adjusted Basis Appreciation
  Cash $32,250 $32,250
  Receivables 18,600 18,600
  Building 136,000 68,000 68,000
  Land 269,250 89,750 179,500
Total $456,100 $208,600 $247,500
Payables $27,200 $27,200
  Mortgage* 135,750 135,750
Total $162,950 $162,950
Ernesto was asking for $408,000 for the company. His tax basis in the BLI stock was $150,000. Included in the sales price was an unrecognized customer list valued at $150,000. The unallocated portion of the purchase price ($68,000) will be recorded as goodwill. Required:
a. What amount of gain or loss does BLI recognize if the transaction is structured as a direct asset sale to Amy and Brian? What amount of corporate level tax does BLI pay as a result of the transaction, assuming a tax rate of 34 percent?
b. What amount of gain or loss does Ernesto recognize if the transaction is structured as a direct asset sale to Amy and Brian, and BLI distributes the after-tax proceeds (computed in question a) to Ernesto in liquidation of his stock?
c. What is the nature of tax benefits to Amy and Brian as a result of structuring the acquisition as a direct asset purchase?
d. What is the tax basis in the assets received by Amy and Brian?
Answer:
Bottom Line, Inc. (BLI)
a. The amount of gain that BLI should recognize if the transaction is structured as a direct asset sale to Amy and Brian is:
= $199,400
BLI will a corporate tax of $ 67,796 ($199,400 * 34%) as a result of the transaction.
b. The amount of gain that Ernesto recognizes when BLI distributes the after-tax proceeds to Ernesto in liquidation of his stock is:
= $190,204
c. Amy and Brian can step up the tax basis of the assets to their fair market values.
d. The tax basis in the assets received by Amy and Brian is:
= $408,000
Explanation:
a) Data and Calculations:
FMV Adjusted Basis Appreciation
Cash $32,250 $32,250
Receivables 18,600 18,600
Building 136,000 68,000 68,000
Land 269,250 89,750 179,500
Total $456,100 $208,600 $247,500
Payables $27,200 $27,200
Mortgage* 135,750 135,750
Total $162,950 $162,950
Net Value $293,150 $45,650
Sales price for the company = $408,000
Ernesto tax basis in BLI stock = 150,000
Difference = $258,000
Unrecognized customer list = 150,000
Unallocated Goodwill = $108,000
Gain to be recognized if transaction is a direct asset sale:
Sales price = $408,000
Adjusted basis 208,600
Capital gain = $199,400
After-tax proceeds:
Sales price = $408,000
Corporate tax on capital gain = $ 67,796
After-tax proceeds = $340,204
Ernesto's tax basis = 150,000
Capital gain for Ernesto = $190,204
Stephenson Company's computer system recently crashed, erasing much of the company's financial data. The following accounting information was discovered soon afterwards on the CFO's back-up computer data.
Cost of Goods Sold $400,000
Work-in-Process Inventory, Beginning 35,000
Work-in-Process Inventory, Ending 46,000
Selling and Administrative Expense 59,000
Finished Goods Inventory, Ending 18,000
Direct Materials Purchased $194,900
Factory Overhead Applied $125,600
Operating Income $25,000
Direct Materials Inventory, Ending $6,800
Cost of Goods Manufactured $380,900
Direct Labor $62,700
The CFO of Stephenson Company has asked you to recalculate the following accounts and report to him by week's end. What should be the amount of direct materials available for use?
Answer:
$210,400
Explanation:
Particulars Amount
Cost of Goods Manufactured $380,900
Add: Closing WIP $46,000
Less: Opening WIP -$35,000
Less: Factory Overhead Applied -$125,600
Less: Direct Labor -$62,700
Add: Closing stock of Direct material $6,800
Direct Material Available for use $210,400
You work in the finance division of a company listed in the Stock Exchange. You have just learned that your supervisor has been using infomation on quarterty retums, prior to the time they are made public, to trade in the company's stock. Is this unethical? If yes, name the elhical issue. Explain why you think there is or not an ethical issue
Answer:
Yes it is. Ethical issue ⇒ Insider Trading.Explanation:
Trading on the stock exchange is supposed to be as fair as possible so that every investor has a fair chance of making returns. If a person - like this supervisor - is using information that is material but not publicly disclosed yet to trade on markets, the fairness of the market is compromised because the person will have an edge over other investors which will enable them make unfair profits.
Information on quarterly returns is usually material so we can expect it to be material here as well which means that the supervisor is engaged in insider trading.
Insider trading is not only unethical but also highly illegal. Reporting your supervisor can get them sent to jail.
The following events apply to Montgomery Company for Year 1, its first year of operation: Received cash of $49,000 from the issue of common stock. Performed $68,000 of services on account. Incurred $10,500 of other operating expenses on account. Paid $41,000 cash for salaries expense. Collected $44,500 of accounts receivable. Paid a $5,000 dividend to the stockholders. Performed $11,500 of services for cash. Paid $7,500 of the accounts payable. Required a. Record the preceding transactions in general journal form. b. Post the entries to T-accounts and determine the ending balance in each account. c.
Answer:
Montgomery Company
a. Journal Entries
Account Title Debit Credit
Cash $49,000
Common stock $49,000
To record the issue of common stock for cash.
Accounts Receivable $68,000
Service Revenue $68,000
To record the performance of services on account.
Operating Expense $10,500
Accounts payable $10,500
To record operating expenses incurred on account.
Salaries Expense $41,000
Cash $41,000
To record the payment for salaries expense.
Cash $44,500
Accounts Receivable $44,500
To record cash collected on account.
Dividends $5,000
Cash $5,000
To record the payment of dividend to stockholders.
Cash $11,500
Service Revenue $11,500
To record the performance of services for cash.
Accounts payable $7,500
Cash $7,500
To record the payment on account.
b. T-accounts
Cash Account
Account Title Debit Credit
Common stock $49,000
Salaries expense $41,000
Accounts receivable 44,500
Dividends 5,000
Service revenue 11,500
Accounts payable 7,500
Balance 51,500
Totals $105,000 $105,000
Common Stock
Account Title Debit Credit
Cash $49,000
Accounts Receivable
Account Title Debit Credit
Service Revenue $68,000
Cash $44,500
Balance 23,500
Totals 68,000 68,000
Service Revenue
Account Title Debit Credit
Accounts receivable $68,000
Cash 11,500
Balance $79,500
Totals 79,500 79,500
Accounts Payable
Account Title Debit Credit
Operating Expense $10,500
Cash $7,500
Balance 3,000
Totals $10,500 $10,500
Operating Expense
Account Title Debit Credit
Accounts payable $10,500
Salaries Expense
Account Title Debit Credit
Cash $41,000
Dividends
Account Title Debit Credit
Cash $5,000
c. Trial Balance as of December 31, Year 1:
Account Title Debit Credit
Cash $51,500
Common stock $49,000
Accounts receivable 23,500
Service revenue 79,500
Accounts payable 3,000
Operating expense 10,500
Salaries expense 41,000
Dividends 5,000
Totals $131,500 $131,500
Explanation:
a) Transactions:
Received cash of $49,000 from the issue of common stock.
Performed $68,000 of services on account.
Incurred $10,500 of other operating expenses on account.
Paid $41,000 cash for salaries expense.
Collected $44,500 of accounts receivable.
Paid a $5,000 dividend to the stockholders.
Performed $11,500 of services for cash.
Paid $7,500 of the accounts payable.
b) Journal entries record the transactions for the first time. General ledger accounts are where the accounts are summarized. Trial balance shows the list of the account balances extracted from the general ledger.
Mike Greenberg opened Cheyenne Window Washing Inc. on July 1, 2022. During July, the following transactions were completed.
July 1 Issued 9,800 shares of common stock for $9,800 cash.
1 Purchased used truck for $6,560, paying $1,640 cash and the balance on account.
3 Purchased cleaning supplies for $740 on account.
5 Paid $1,440 cash on a 1-year insurance policy effective July 1.
12 Billed customers $3,030 for cleaning services performed.
18 Paid $820 cash on amount owed on truck and $410 on amount owed on cleaning supplies.
20 Paid $1,640 cash for employee salaries.
21 Collected $1,310 cash from customers billed on July 12.
25 Billed customers $2,050 for cleaning services performed.
31 Paid $240 for maintenance of the truck during month.
31 Declared and paid $490 cash dividend.
Journalize the July transactions.
Post to the ledger accounts.
Prepare a trial balance at July 31.
Journalize the following adjustments. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
(1) Services performed but unbilled and uncollected at July 31 were $1,750.
(2) Depreciation on equipment for the month was $202.
(3) One-twelfth of the insurance expired.
(4) An inventory count shows $320 of cleaning supplies on hand at July 31.
(5) Accrued but unpaid employee salaries were $415.
Answer:
Cash (Dr.) $9.800
Common Stock (Cr.) $9,800
Truck (Dr.) $6,560
Cash (Cr.) $1,640
Accounts Payable -Truck (Cr.) $4,920
Cleaning Supplies (Dr.) $740
Accounts Payable (Cr.) $740
Prepaid Insurance (Dr.) $1,440
Cash (Cr.) $1,440
Accounts Receivable (Dr.) $3,030
Service Revenue (Dr.) $3,030
Accounts Payable - Truck (Dr.) $820
Accounts Payable - Supplies (Dr.) $410
Cash (Cr.) $1,230
Cash (Dr.) $1,310
Accounts Receivable (Cr.) $1,310
Maintenance Expense Truck (Dr.) $240
Cash (Cr.) $240
Dividend paid (Dr.) $490
Cash (Cr.) $490
Explanation:
1) Accounts Receivable (Dr.) $1,750
Service Revenue (Cr.) $1,750
2) Depreciation expense (Dr.) $202
Accumulated Depreciation (Cr.) $202
3) Insurance Expense (Dr.) $120
Prepaid Insurance (Cr.) $120
4) Ending Inventory (Dr.) $320
Cleaning Supplies (Cr.) $320
5) Salaries Expense (Dr.) $415
Salaries Payable (Cr.) $415
if you were living in a world without a financial system ,how would you make provisions towards your retirement.
One of the key decisions employers must make is the level of compensation provided to employees. Compensation is a significant cost, and employees are one of the most important assets of the organization. It is important that the organization makes and executes good strategic choices. To facilitate this process, many organizations think systematically about its job structures for compensation and pay levels for different jobs.
An organization's job structure consists of relative pay for different functions and different levels of responsibility. It defines, for example, the difference in pay between entry-level and management jobs, as well as different entry-level jobs in different departments, such as in production or accounting. Pay level is the average amount that an organization pays for a particular job and includes wages, salaries, and bonuses. Job structure and pay levels together form the pay structure, a policy that helps the organization achieve goals related to employee motivation, cost control, and the ability to attract and retain talented employees.
This activity is important because it will help you distinguish between the various factors that impact an organization’s pay structure. The goal of this activity is to classify decisions based on the factors used to establish a pay structure.
HR professionals develop pay structures for their organations based on such factors as legal requirements, company goals, and market forces. Drag each item into the appropriate column on the chart.
1. Equal pay for equal work
2. National compensation survey
3. Product markets
4. Benchmarking
5. Equitable pay rates
6. Child labor laws
7. Federal minum- wage laws
8. Overtime pay
9. Retention of talented staff
10. Trends in labor markets
11. Company cost centers
A. Legal Requirements
B. Organizational Goals
C. Market Forces
Answer:
1. Company goals
2.Market forces
3. market forces
4. company goals
5. market forces
6. legal requirement
7. legal requirement
8. company goals
9. company goals
10. market survey
11. company goals
Explanation:
Company goals is to maintain its business profitable. It is important for a business to retain its talented employees for maintaining quality of products. Legal requirements are the laws which are required to be followed by the businesses.
Jose purchased a delivery van for his business through an online auction. His winning bid for the van was $25,250. In addition, Jose incurred the following expenses before using the van: shipping costs of $1,270; paint to match the other fleet vehicles at a cost of $1,440; registration costs of $2,970, which included $2,750 of sales tax and an annual registration fee of $220; wash and detailing for $121; and an engine tune-up for $327.
Required:
What is Joseâs cost basis for the delivery van?
Answer:
$30,710
Explanation:
Calculation for Jose cost basis for the delivery van
Van Winning bid $25,250
Add Shipping costs of $1,270
Add Paint to match the other fleet vehicles $1,440
Add Sales tax $2,750
Basis for the delivery van $30,710
($25,250 + $1,270 + $1,440 + $2,750 )
Therefore Jose cost basis for the delivery van was $30,710