Donata Company purchased equipment for $45,000 in December 20x1. The equipment is expected to generate $12,000 per year of additional revenue and incur $6,000 per year of additional cash expenses, beginning in 20x2. Under MACRS, depreciation in 20x2 will be $7,000. If the firm's income tax rate is 20%, the after-tax cash flow in 20x2 would be: Multiple Choice O O с $1,200. $2,200. $3.600.
Q: Jain Enterprises honors a short-term note payable. Principal on the note is $425,000, with an annual…
A: Introduction: Journals: Recording of a business transactions in a chronological order. Each and…
Q: Company E is a large manufacturer that treats its divisions as profit centers. Division X produces…
A: When the supplying division is operating at full capacity, the Minimum Transfer Price would be: =…
Q: 2. The selling price decreases by P1.50 per unit, and the sales increases by 25%.
A: Current data, Selling price = P300,000 / 20,000 = P15.00 per unit Revised Price = P15.00 - P1.50 =…
Q: Which of the statements below, are potential benefits arising from an assurance service? I.…
A: ASSURANCE SERVICES ARE AN INDEPENDENT EXAMINATION OF A COMPANY'S PROCESS AND CONTROLS . IT AIMS TO…
Q: Which of the following financial statements would be improperly prepared as part of the annual 10K…
A: Annual reports are those reports which are and have to be prepared by the company in order to comply…
Q: orporation purchased under the executive's a mot name w much is the fringe benefits
A: Introduction: The benefits which are provided by the employer which acts as job satisfaction to…
Q: A manufacturing company that produces a single product has provided the following data concerning…
A: Variable costing: It refers to a method of deriving net income by only considering variable…
Q: pany is preparing its master budget for 2022. Relevant data pertaining to its sales, production, and…
A: A sales budget is a financial plan that estimates a company's total revenue in a specific time…
Q: 1. In 2018, Delta Corporation bought a condominium unit on installment for the use of its executive.…
A: Fringe benefits tax (FBT) was a type of tax levied by businesses in lieu of benefits provided to…
Q: A $2,500 par value bond matures in 20 years and has a coupon rate of 8.5%. If the market's required…
A: To calculate the price of the bond following data will be fed in excel to calculate present value of…
Q: drive at Php 320 is equal to 7/5th of the profit obtained by selling the same flash drive at Php…
A: The cost price can be calculated by comparing the profits under the two alternatives.
Q: On July 1, 2022, X Co. borrowed $520,000 at 7%. The loan is repayable over 5 years in annual…
A: Formula: Payment of Principal = Annual installments - Interest payment where, Interest payment =…
Q: GAAP stands for:
A: GAAP stands for Generally Accepted Accounting Principles
Q: 1. Question Content Area Sales Budget FlashKick Company manufactures and sells soccer balls for…
A: Budgeting is an important tool for the cost managers of an entity it helps to forecast the…
Q: Terminology Matching Continued FASB Comparability Verifiable Consistency Free Cash Flow Chart of…
A: Accounting: It implies to a process including recording, analyzing, and presenting the financial…
Q: uestion Content Area Cost of Goods Sold Budget Play-Disc makes Frisbee-type plastic discs. Each…
A: The cost of goods manufactured is the sum of the cost of direct labor used, the cost of direct…
Q: Johnson Company uses a perpetual inventory system. On October 23, Johnson purchased $100,000 of…
A: 1/15 net 45 means 1% discount is allowed if payment is made within 15 days. If payment after 45 days…
Q: requires alue of money at machinery for $86- value. Cougar d anged the machin
A: Given: Cougar to pay 100,000 identical piece of machinery $86,000 Cougar paid=$10,000 fair…
Q: Leverage Ratios Grammatico Company has just completed its third year of operations. The income…
A: Solution:- Leverage Ratios identify the ability of a company to meet its financial obligations.…
Q: a. Compute the net cost of investment in the new machine for decision making purposes. b. Assuming…
A: SN Particulars Amount A New Machine Cost (Purchase Cost) P 50,000 B Cost incurred for bringing…
Q: On November 1, 2021, Jamison Inc. adopted a plan to discontinue its barge division, which qualifies…
A: Introduction:- Discontinued operations means parts of a company's business operations have been…
Q: Explain two main reasons why expenses may not be deductible for income tax/corporation tax purposes
A: Deductible expenses: These include all the expenses that are allowed to be deducted from the gross…
Q: Russ has developed a new device, which he hopes to produce and market on a large scale. Russ will…
A: Product cost is cost incurred that relate to production of unit. It can be direct cost such as…
Q: Jessie Stores uses the periodic system of calculating inventory. The following information is…
A: The first in, first-out (FIFO) inventory valuation method is based on the cost flow assumption that…
Q: Marathon Peanuts converts a $130,000 account payable into a short-term note payable, with an annual…
A: Formula: Interest amount = Accounts payable Amount x Interest rate x Time period
Q: Use the information provided for Harding Company to answer the question that follow. Harding Company…
A: Quick ratio = Quick assets / current liabilities where, Quick assets = Current assets - Inventory -…
Q: Berring Company produces two products: the deluxe and the standard. The deluxe sells for $40, and…
A: “Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: Dani Corporation signed a binding commitment on December 2 to purchase inventory for $300,000 cash…
A: Purchase commitment Liability = committed price for purchase - Replacement cost =$300000 -$280000…
Q: Sales are 2,000,000. COGS are 1,000,000. Depreciation is 300,000. Taxes are 150,000. SG&A is…
A: Formula used: Operating cash flow = Net income + Depreciation. Sum of both net income and…
Q: a. Purchased 5,400 shares of its own common stock at $29 per share on October 11. . Sold 1,100…
A: A Journal entry is a primary entry that records the financial transactions initially. The…
Q: Use the table below to answer questions about Christina's Christmas Wreaths. Christina operates in a…
A: calculation of above requirement are as follows
Q: Profitability Ratios The following information has been gathered for Malette Manufacturing: Net…
A: Solution:- 1)Computation of the return on assets as follows under:- It measures a company's…
Q: Which of the following about the days' sales uncollected ratio is false?
A: Days sales uncollected is a Liquidity ratio that is used to determine number of days befire…
Q: An entity sells inventory with a list price of P10,000 under credit terms of 20%, 10%, 2/15, n/30.…
A: Accounts receivable is the amount receivable from the customers upon credit sales. Companies will…
Q: Halep Inc. borrowed $30,000 from Davis Bank and signed a 4-year note payable stating the interest…
A: Amortization is the act of allocating the cost of an asset into expense incrementally over its…
Q: The capital account of Gene, Inc. on December 31, 2014 were as follows: Preference share capital,…
A: GIVEN The capital account of Gene, Inc. on December 31, 2014 were as follows: Preference…
Q: Required information [The following information applies to the questions displayed below.] The…
A: 1. Accounting Equation - Accounting Equation is calculated using following equation - Assets =…
Q: For the fiscal year 2015, Zeus Inc. recorded $1,750,000 in credit sales. On December 31, 2015, the…
A: Solution:- Preparation of necessary adjusting journal entries as follows under:- Journal entry is…
Q: Level of Activity 4000 units 6500 units 7000 units Revenue Variable costs…
A: Formula: Contribution Margin = Sales - Variable costs Contribution Margin per unit = Contribution…
Q: Marathon Peanuts converts a $130,000 account payable into a short-term note payable, with an annual…
A: The accrued interest is the interest due for payment but not yet paid.
Q: As franchisee, Virgie delos Reyes had the following data on revenue and receivables: From Operations…
A: As per the Given Information in the Question, 1) From Operations covered by the franchise: Revenues…
Q: In a period, sales are $140,000, purchases $75,000 and other expenses $25,000. What is the figure…
A: Net profit = Total sales - Total expenses
Q: a. Lower net revenue. QUESTION 20 Which of the following statements is not true about a 2-for-1…
A: whenever the stock split takes place then the shareholder who were holding the shared in the company…
Q: A company has assets totaling $30,000, sales revenues of $100,000, rent expense of $24,000, wages…
A: Lets understand the basics. For calculating net income, we need to use below formula. Net income =…
Q: The following costs have been identified in relation to the production of a product except :…
A: The production cost includes direct material, direct labor, and other manufacturing overhead.
Q: Which of the following ratios is a measure of solvency? Multiple Choice Total asset turnover.…
A: Ratio Analysis - The ratio is the technique used by the prospective investor or an individual or…
Q: 1 How does the cryptocurrency trend affect businesses and consumers (both globally and domestically
A: A peer-to-peer network known as a blockchain monitors and organizes it while also serving as a…
Q: Assume that the Valenzuela Corporation issues P1,000,000, 5-year, 12% bonds on March 2020. bonds,…
A: Formula: Interest amount = Bond amount x Interest rate x Time period
Q: Zack Corp. had the following information for 2019: Sales $500,000 Operating income 50,000…
A: The residual income is the excess of net income earned over the desired income to be earned.
Q: If budgeted begin inventory is $20,600, budgeted ending inventory is $23,600, and budgeted cost of…
A: GIVEN If budgeted begin inventory is $20,600, budgeted ending inventory is $23,600, and budgeted…
Step by step
Solved in 2 steps
- The Berndt Corporation expects to have sales of 12 million. Costs other than depreciation are expected to be 75% of sales, and depreciation is expected to be 1.5 million. All sales revenues will be collected in cash, and costs other than depreciation must be paid for during the year. Berndts federal-plus-state tax rate is 40%. Berndt has no debt. a. Set up an income statement. What is Berndts expected net income? Its expected net cash flow? b. Suppose Congress changed the tax laws so that Berndts depreciation expenses doubled. No changes in operations occurred. What would happen to reported profit and to net cash flow? c. Now suppose that Congress changed the tax laws such that, instead of doubling Berndts depreciation, it was reduced by 50%. How would profit and net cash flow be affected? d. If this were your company, would you prefer Congress to cause your depreciation expense to be doubled or halved? Why?Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the purchase of the printer impacts not only depreciation expense each year but also the assets book value. What amount will be recorded as depreciation expense each year, and what will the book value be at the end of each year after depreciation is recorded?The Fleming Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated below. The corporate tax rate is 23 percent. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project. Investment Sales revenue Operating costs Depreciation Net working capital spending Net income $ Year 1 Year O 42,000 480 Year 1 Year 2 Year 3 Year 2 22,500, $21,500 $ 22,000$ 4,500 4,600 4,700 10,500 10,500 10,500 530 580 480 a. Compute the incremental net income of the investment for each year. (Do not round intermediate calculations.) Year 3 Year 4 Year 4 $19,500 3,900 10,500 ?
- The Fleming Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated below. The corporate tax rate is 25 percent. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project. Investment Sales revenue Operating costs Depreciation Net working capital spending Net income Cash flow $ Year 1 NPV 3,975 $ $ Year 0 Year O 34,000 $ 400 a. Compute the incremental net income of the investment for each year. (Do not round intermediate calculations.) Year 1 $ 17,500 3,700 8,500 450 Year 2 4,275 $ Year 1 5,300 $18,000 Year 2 Year 3 b. Compute the incremental cash flows of the investment for each year. (Do not round intermediate calculations. A negative answer should be indicated by a minus sign.) Year 3 4,575 $ Year 2 3,800 3,900 8,500 8,500 500 400 $18,500 $15,500 3,100 8,500 ? Year 4 Year 4…A company has purchased a machine (CCA rate 27 %) at $232,000 and has a tax rate of 38.00%. By how much will the NPV change if the company is able to obtain a $15,000 salvage value for its machine at the end of the project's life in Year 4? Assume a discount rate of 10.10% and that all else remains the same. a. $13,031 b. $10,208 c. - $2,823 d. $7,385 e. $10,852Daly Publishing Corporation recently purchased a truck for $43,000. Under MACRS, the first year's depreciation was $8,600. The truck driver's salary in the first year of operation was $61,800. The company's tax rate is 30 percent. Required: 1-a. Calculate the after-tax cash outflow for the acquisition cost and the salary expense. 1-b. Calculate the reduced cash outflow for taxes in the first year due to the depreciation. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Calculate the after-tax cash outflow for the acquisition cost and the salary expense. After-Tax Cash Outflow Acquisition cost Salary expense
- Daly Publishing Corporation recently purchased a truck for $30,000. Under MACRS, the first year’s depreciation was $6,000. The truck driver’s salary in the first year of operation was $32,000. The company’s tax rate is 30 percent. Required: 1-a. Calculate the after-tax cash outflow for the acquisition cost and the salary expense. 1-b. Calculate the reduced cash outflow for taxes in the first year due to the depreciation.The Hills Company, a calendar year company, purchased a new machine for P280,000 on January 1. Depreciation for tax purposes will be P35,000 annually for eight years. The accounting (book value) rate of return (ARR) is expected to be 15% on the initial increase in required investment. On the assumption of a uniform cash inflow, this investment is expected to provide annual cash flow from operations, net of income taxes, of Group of answer choices P40,250 P77,000 P35,000 P42,000A firm is investing in an equipment which falls in 5-years MACRS. The cost of the machineis $200,000 and the firm spent $20,000 for shipping, at the end of its life the machine couldbe sell for $30,000. If the firm is in 34% tax bracket compute the tax savings fromdepreciation in year-5.a.b.$ 14,960.00$ 13,600.00$ 11,333.33$ 8,616.96
- A business purchases a capital asset for $289,000. The asset will be placed in a 20% CCA asset class and qualify for the Accelerated Investment Incentive. The business has a 35% marginal income tax rate. What is the CCA tax shield (e.g. reduction in taxes) for the third year as a result of owning this asset? a. $11,006 b. $11,455 c. $11,329 d. $11,218 e. $10,924Economics A company purchased a piece of equipment for $175,000 and sells it after 3 years. The equipment is depreciated by the MACRS method using a five-year period. The annual maintenance cost of the equipment is $3,000. If the equipment is sold at end of 3 years for a value of $100,000, what will be the taxes that has to be paid from the sale of the equipment? Assume that the tax rate is 35%. O $6790 O $11480 O $8136 O No taxis to be paidThe Fancy Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated here. The corporate tax rate is 21 percent. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project. Year 1 Year 2 a. Investment Sales revenue Operating costs Depreciation Net working capital spending 305 Year 0 $ 26,400 C. $ 13,500 2,950 6,600 205 Year 3 $15,100 3,125 4,300 6,600 6,600 235 $16,500 155 Year 4 $13,000 2,900 6,600 ? Compute the incremental net income of the investment for each year. (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) Compute the incremental cash flows of the investment for each year. (A negative amount should be b. indicated by a minus sign. Do not round intermediate calculations and round your answers to the nearest whole number,…