(TCO A) On March 1, 2010, Ruiz Corporation issued $800,000 of 8% nonconvertible bonds at 104, which are due on February 28, 2030. In addition, each $1,000 bond was issued with 25 detachable stock warrants, each of which entitled the bondholder to purchase for $50 one share of Ruiz common stock, par value $25. The bonds without the warrants would normally sell at 95. On March 1, 2010, the fair market value of Ruiz's common stock was $40 per share and the fair market value of the warrants was $2.00. What amount should Ruiz record on March 1, 2010 as paid-in capital from stock warrants?
In year 2 it reports a $40,000 loss. For year 3, it reports taxable income from operations of $100,000 before any loss carryovers. Using the corporate tax rate table, determine how much tax Willow Corp. will pay for year 3. Answer: $4,500. Description (1) Year 3 taxable income $100,000 (2) Year 1 NOL carryforward ($30,000) (3) Year 2 NOL carryforward ($40,000) (4) Taxable income reported 30,000 (1) - (2) -
The difference resulted from $60,000 of nondeductible premiums on Ajax's officers' life insurance and $40,000 of rental income received in advance. Rental income is taxable when received. Ajax's effective tax rate is 30%. In its Year 2 income statement, what amount should Ajax report as income tax expense-current portion? 5.
15. Question: : (TCO D) On January 1, Martinez Inc. issued $3,000,000, 11% bonds for $3,195,000. The market rate of interest for these bonds is 10%. Interest is payable annually on December 31. Martinez uses the effective-interest method of amortizing bond premium.
The company could sell a new issue of 25-year bonds at an annual interest rate of 11.67% in today's market. A call premium of 14% would be required to retire the old bonds, and flotation costs on the new issue would amount to $3 million. NYW's marginal tax rate is 40%. The new bonds would be issued when the old bonds are called. What will the after-tax annual interest savings for NYW be if the refunding takes place?
Brief Exercise 4-10 Your answer is correct. Portman Corporation has retained earnings of $720,100 at January 1, 2014. Net income during 2014 was $1,651,000, and cash dividends declared and paid during 2014 totaled $82,800. Prepare a retained earnings statement for the year ended December 31, 2014. Assume an error was discovered: land costing $87,010 (net of tax) was charged to maintenance and repairs expense in 2011.
The present value of a four-year annuity due of $10,000 at a 6 percent annual rate is $36,700. The present value of a four-year annuity due of $10,000 at an 8 percent annual rate is $35,770. What liability should Ace report on its December 31, Year One, balance sheet? 1. $0 2.
During 2010 they issued stock for $98,000, and paid dividends of $34,000. Net income for 2010 was $402,000. The retained earnings balance at the beginning of 2010 was: (Points : 3) $2,552,000 $1,816,000 $1,914,000 $2,454,000 Question 11. 11. (TCO D) Money collected from customers before the work is done is treated as (Points : 3) prepaid expenses.
BRIEF EXERCISE 19-8 Income before income taxes $195,000 Income tax expense Current $48,000 Deferred 30,000 78,000 Net income $117,000 BRIEF EXERCISE 19-10 Year | Future taxable amount | X | Tax Rate | = | Deferred tax liability | 2013 | $ 42,000 | 34% | $ 14,280 | 2014 | 244,000 | 34% | 82,960 | 2015 | 294,000 | 40% | 117,600 | | | | $214,840 | BRIEF EXERCISE 19-14 Income Tax Refund Receivable ($350,000 X. 40) 140,000 Benefit Due to Loss Carryback 140,000 Deferred Tax Asset ($500,000 – $350,000) X .40 60,000 Benefit Due to Loss Carryforward 60,000 Benefit Due to Loss Carryforward 60,000 Allowance to Reduce Deferred
The tax on the year 1 deprecation would then be $28,050 * .40, which equals $11,220. After adding $11,020 to the $15,000 in savings, the cash flow for year 1 would equal $26,220. For year 2, the depreciation expense would equal $85,000 * .45, or $38,250. The tax on the year 2 deprecation would then be $38,250 * .40, which equals $15,300. After adding $15,300 to the $15,000 in savings, the cash flow for year 2 would equal $30,300.