Assume CCS's tax rate is 35 percent. a. How much total income tax will Custom Craft Services and Jaron pay (combining both corporate and shareholder level tax) on the $200,000 taxable income for the year if CCS doesn't pay any salary to Jaron and instead distributes all of its after-tax income to Jaron as a dividend? b. How much total income tax will Custom Craft Services and Jaron pay (combining both corporate and shareholder level tax) on the $200,000 of income if CCS pays Jaron a salary of $150,000 and distributes its remaining after-tax earnings to Jaron as a dividend?
What was Brady Brothers cash basis income? Cash basis income: $6,000 (cash received) - $5,000 (cash paid) = Answer: $1,000 Question 3: What was Brady Brothers accrual basis income? Accrual basis income: $12,000 (revenue earned) - $8,000 (expenses incurred) = Answer: $4,000 Question 4: Anderson Company’s balance sheet at the end of the year revealed the following information: Clients owe Anderson Company $35,300 for completed projects. Anderson Company owns office equipment totaling $95,500. Anderson Company owns $5,000 of material used on various client projects.
legal fees, and amortized over 5 years or less. expenses of the period. patents, and amortized over the remaining useful life of the patent. Instructor Explanation: Chapter 12 Points Received: 5 of 5 Comments: Question 3. Question : (TCO C) Negative goodwill arises when the _____ of the net assets acquired is higher than the purchase price of the assets.
You could pull the money out and use it towards the house. 2. How many months' worth of expenses do you think your financial reserve should include? Describe at least two reasons for this decision. (3-6 sentences.
The business required £30,000 cash for working capital. The company gets a loan of £450,000 which was transfer into the business bank account in January as shown in appendix 6. The cash budget shows a balance of £3,918 in January and £16,335 February. The loan calculation is shown in appendix 8. This is expected to be paid back within 8 years by monthly paid instalments of £5.718.41 which was calculated on a 5.1% interest rate.
Because this property is normally sold, the lessee (Royal) must report it as a sales-type lease. 3. If the machine has an expected life of five years, then both parties must report the transaction as a capital lease. 4. If the lease contract gives Royal the option to buy the machine at the end of four years, then both parties must report the transaction as a capital lease 28.
Your firm is trying to determine its cash disbursements for the next two months (June and July). In any month, the firm makes purchases of 60% of that month’s sales, which are paid the following month. In addition, the firm incurs the following costs every month and pays for them in the month the expenses are incurred: wages and salaries of $10,000, rent of $4,000, and miscellaneous cash expenses of $1,000. Depreciation amortized on a monthly basis is $2,000. June’s sales are expected to be $100,000, and July’s sales are expected to be $150,000.
Assume that (i) if the trial proceeds it is expected to last less than a month and result in two possible outcomes in terms of the price per share established in court: the $273,000 claimed by the plaintiffs, or the $55,400 being defended by Herbert Kohler; (ii) Kohler estimates the probabilities of these outcomes at 30% and 70%, respectively. 5. How would your answer to question 4 change if you also assume that (i) the inheritance tax owed on Frederic Kohler’s estate was 50.2% of its holdings in Kohler Co. (equivalent to 489 shares of the 975 he owned); (ii) the taxes paid by the estate amounted to $27 million (489 shares at $55,400 each); (iii) were the settlement or the trial to result in a revised share price in excess of $55,400, the IRS would likely demand a similar valuation for its claim on Frederic’s estate; and (iv) Herbert Kohler estimates the probability of the IRS’s demand at 100% if he proceeds to trial, and 50% if he
The cost estimated will be drawn out on a five year plan. Financial and operating ratios are as follows: expected annual expense includes salary for TCNs based on an hourly rate of $33.65 and an annual salary of $273,000, with an increase of 3.5% growth each following year. These costs include benefits of $58,945, supplies totaling $500 and other expenses $17,283 which includes the mileage portion. Unfortunately, these FTEs and new service does not generate revenue. The program will require integrating the cost into next year’s budget.
Is Nelson Jones’ estimate that a $350,000 line of credit sufficient for 2007 accurate? Jones currently has $203,000 of accounts payable. He also owes $24,000 per year to his old partner who he bought out. And based upon the projected growth, Jones will need $120,000 of new assets which $73,000 of that will need to be financed through external sources to contribute to the business in order to grow. He also has long-term debt on the balance sheet that he needs to continue to pay off.