Sales units Sales Selling price: $250 100,000 400 Selling price: $250(0.1)= $275 137500 Variable cost: $160 variable cost: $160 Fixed cost: 22500 Fixed cost: 22,500(0.1)= 24750 1. Compute the company’s current break-even point in units and dollars? Break even Units: Fixed expense/CMUnit 22500/90 = 250 CM: 250-160= 90 Dollars: Fixed expense/ Cm ratio 22500/.36= $62500 CM Ratio: units 90/ $250 selling price = .36 2. What is the company’s current margin of safety in Units, dollars and percentage? Margin of Safety (DOLLARS) Budgeted – break even = 100,000-62500= 37500 (Percentage) 37.500/100.000= 37.5% (Units) 37500/250= 150 3.Compute the company’s margin of safety in units assuming the proposal is accepted.
Acct Unit 1 Homework Assignment 06/12/15 Question 1: Brady Brothers, a partnership, has total assets of $350,000 and $100,000 of owners’ equity. What are the partnership’s total liabilities? $350,000 – Liabilities = $100,000 $350,000 - $100,000 = $100,000 - $100,000 Answer: $250,000 = Liabilities Question 2: During the first month of operation, Brady Brothers made sales to customers totaling $12,000 but received only $6,000 from customers in cash. Brady Brothers incurred $8,000 for operating expense but only paid $5,000 in cash for those expenses. What was Brady Brothers cash basis income?
ACCT 550 Week 7 Homework Chapter 11: E11-4, E11-9, E11-11, E11-17 E11-4 (Depreciation Computations—Five Methods) Wenner Furnace Corp. purchased machinery for $279,000 on May 1, 2012. It is estimated that it will have a useful life of 10 years, salvage value of $15,000, production of 240,000 units, and working hours of 25,000. During 2013, Wenner Corp. uses the machinery for 2,650 hours, and the machinery produces 25,500 units. Instructions From the information given, compute the depreciation charge for 2013 under each of the following methods. (Round to the nearest dollar.)
[3] http://www.irs.gov/businesses/small/article/0,,id=146335,00.html It is important to determine if the taxpayer martially participates because this classifies the income as active or passive. Passive activity losses are non-deductable from active and portfolio income. This is why it is important to determine if the taxpayer martially participates in the business activity. PROBLEMS: 7-46) The $30,000 loss is considered a passive loss and can only be deducted against passive income, it is therefore suspended and carried forward to future years to offset potential passive income in those years. Mary has no martially participation in the rental activity, therefore the loss is considered
Case 2 Solution: Problem Identification: How should a company account for forfeited stock subscriptions? Moreover, do such payments constitute operating or other income? Keywords: Stock Subscription; operating income; additional paid-in capital; owners’ equity; net income; operating income. Conclusion: Per 505-10-25-2, capital transactions that incur no future corporate obligations should be excluded from calculating net or operating income. Thus, the forfeited cash should become part of additional paid-in capital about any
It would be my advice for Mr. Jones to not buy the stock because of the liability of current and future tax obligations which Mr. Jones would incur from the purchase of the stock. Since the tax identity of Smithon corporation would have not ceased, it is not a favorable purchase for Mr. Jones. Ina a case where the tax identity of a firm does not cease not to exist, the tax aspects will remain the same and so will the existing tax schedule. So in this case it would mean that Mr. Jones would not be allowed to change the financial year to end on December 31. The buyer in cases where he can’t change the legal entity is in a non -benefice situation, the buyer is limited to follow the current tax basis on the company’s assets even if the buyer paid more for the
How much is National Income? 8. Given: wages, salaries, and fringe benefits = $6.1 trillion; interest = $400 billion; profits = $500; depreciation = $550 billion; rent = $150 billion; and indirect business taxes = $250 billion. Find National Income, NNP, and GDP. 9.
$ 783,500 * E. $ 385,543 Use the following information for the next 4 questions: Eric’s Enterprises, Inc. Income Statement For the Year Ended December 31, 2011 Sales $ 900,000 Cost of Goods Sold 400,000 Gross Margin 500,000 Operating Expenses Wage Expense $250,000 Rent Expense 36,000 Depreciation Expense 30,000 Utilities Expense 18,000 Total Operating Expenses 334,000 Operating Income 166,000 Other Revenues & <Expenses> Interest Expense < 16,000> Taxable Income 150,000 Tax Expense 45,000 Net Income $
Week 2 Practice Question Solutions EXERCISE 4-8 (15–20 minutes) (a) Net sales $ 540,000 Cost of goods sold (210,000) Administrative expenses (100,000) Selling expenses (80,000) Discontinued operations-loss (40,000) Income before income tax 110,000 Income tax ($110,000 X .30) 33,000 Net income $ 77,000 (b) Income from continuing operations before income tax $150,000* Income tax ($150,000 X .30) 45,000 Income from continuing operations 105,000 Discontinued operations, less applicable income tax of $12,000 (28,000) Net income $ 77,000 *$110,000 + $40,000 Earnings per share: Income from continuing operations
Mr. Smith, The $300,000 fee that you earned off of the case could be used in your gross income as directed by Section 61(a) of the Code. The code states that gross income is limited to this item, but that this is merely the most typical source of income. Due to not knowing your combined AGI, it is not known what the tax implications would be completely. Being a LLC has major advantages of a corporation. Your personal assets are not subject to claims of the corporation’s creditors, only your investments in the corporation are subject to any claims.