Research Project ACCY 171 Fall 2013 Alternative A FACTS Both Larry and Wendy are calendar-year, cash method taxpayers. The lease requires an annual rental of $2,000 due in arrears on December 31. Wendy mailed the check on December 30, and Larry received it on January 2. ISSUE In what year should each of the cash method taxpayers include the transaction as an increase or decrease in their gross income? And what are the tax consequences?
This figure is substrated from the acquisition giving a result of £332,641 which is the written down value. The capital allowance for the first year is £66,528 which is shown in appendix 9 Corporation tax worked out at the main rate of 21% from 1st of April of 2011 (Reference 7). The profit substrates the capital allowance and gives the taxable profit for the next year which is shown in appendix
Annuity tables indicate that the present value of an annual lease rental of $1 (at 8% rate) is $3.993 (three dollars and 99.3 cents). The fair value of leased equipment equals the present value of the rentals. Assume the lease is capitalized. • Prepare accounting entries required by Burton for Year 1. • Compute and illustrate the effect on the income statement for the year ended Dec 31, Year 1, and for the balance sheet as of Dec. 31, Year 1.
Sales (7950 units) Variable expenses Contribution margin Fixed expenses Net Operating Income $206,700 143,100 $63,600 56,000 $7,600 $26.00 18.00 $8.00 As an alternative, you could have found the net income using the following method: Original net operating income Change in contribution margin (-50 units * $8.00 per unit) New net operating income 3. The sales volume is 7,0000. $8,000 -400 $7,600 Sales (7000 units) Variable expenses Contribution margin Fixed expenses Net Operating Income $182,000 126,000 $56,000 56,000 $0 $26.00 18.00 $8.00 This is the company's break even point because it it the point where the contribution margin covers the fixed expenses and there is no net income/net loss (it is zero). Exercise 5-4 Computing and Using the CM Ratio Last month when Harrison Creations, Inc., sold 40,000 units, total sales were $300,000, total variable expenses were $240,000, and total fized expenses were $45,000. Required: 1.
We estimated how many customers we need to breakeven each year. Cash flow Projection for five years Cash Flow Analysis Year 1 Beginning Balance $0 Capital $10,000 Revenue (10 Clients) 59,700 $66,700 Disposables Purchases 49,700 Administrative $7,400 (Advertising 200, Other costs 200, Airlines 1,000, Office 6000) Wages $4,000 (2,000 each for Benny and Janet) $61,100 Ending Balance $5,600 Year 2 Beginning Balance $5,600 Revenue (15 Clients) $89,550 $93,150
depreciation over 3 years Depreciation costs per year: 24/3= 8 mln per year. Q3. Tax rate in 2012 = Income Tax Expense / Income Before Tax = 1127mln/4914 mln = 22,93% Q4. | Year 0 | Year 1 | Year 2 | Year 3 | | | | | | | | R&D expenses | -77 | | | | | | | | | | | Total Revenues | | 110 | 83 | 55 | All in millions | Cost of Goods Sold | | -8 | -8 | -5 | | Gross Profit | | 102 | 75 | 50 | | depreciation | | -8 | -8 | -8 | | Adm/sales/etc | | -3 | -3 | -2 | | EBIT | -77 | 91 | 64 | 40 | | Unl Net income | -59,34 | 70,13 | 49,32 | 30,83 | | Q5.
Calculate the PAYG instalment income for the quarter. FBT rate varied Variation of FBT Fringe benefits ATO instalment preprinted on BAS 19 F1 2 400 Estimated total fringe benefits tax payable for year Varied fringe benefits tax instalment amount Transfer the amount at F3 to 6A on the BAS Summary F2 F3 F4 12 000 3 000 30 Reason for variation PAYG rate varied PAYG income tax instalment For the QUARTER from 1 Oct 20XX to 31 Dec 20XX Option 2: Calculate PAYG instalment using income times rate PAYG instalment income T1 $ 5 5.61 4 5 % 6
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
• NPAT* excluding sass & bide put option revaluation $129 million, down 5.1% • Strong cash flow supports final dividend of 8 cps, full year dividend 18 cps, fully franked “Continued execution of five-point plan” * Excludes sass & bide put option revaluation: FY2012 ($3.0 million gain) and FY2013 ($2.2 million expense) Image: TBC (TBC) Image: Orla Kiely DELIVERING OUR PLAN / 3 Full year highlights • Sales and gross profit growth in key categories • Myer Exclusive Brands now 20.0% of sales mix • sass & bide double-digit sales and profit growth • Increased recognition of our customer service journey • Ongoing investment: new stores, refurbishments, brands, online • MYER one strengthened with Platinum tier, app launched • Online sales, page views and average monthly visits doubled • Net debt down 11.2%, lending facilities refinanced Image: sass & bide OVERVIEW / 4 12 September 2013 2 MYER Full Year Results 2013 • • • • • Overview Financial update Delivering our five-point plan Investing for the future Outlook Image: Wayne by Wayne Cooper (Myer Exclusive Brand) Financial
Chelsea Corporation (34 Chelsea Drive, Sarasota, Florida, 33456) is a calendar-year corporation; its EIN is 78-9999999 and it was incorporated on June 15, 2002. It reported the following for the current year: Sales = $1,450,000 Pension Contribution = $28,000 Cost of Sales = $625,000 Meals and Entertainment = $12,000 Officers Compensation = $187,000 Utilities = $21,000 Salary and Wages = $266,000 Repairs and Maintenance =