Sandersen Inc. sells minicomputers. During the past year, the company's sales were million. The cost of its merchandise sold came to $ million, and cash operating expenses were $; depreciation expense was $, and the firm paid $ in interest on its bank loans. Also, the corporation paid $ in the form of dividends to its own common stockholders. Calculate the corporation's tax liability by using the corporate tax rate structure in the popup window,

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Answer 1

Answer:

Question Completion:

Sandersen Inc, sells minicomputers. During the past year, the company's sales were 3.00 million. The cost of its merchandise sold came to 2.00 million, and cash operating expenses were 400,000; depreciation expense was 100,000, and the firm paid 150,000 in interest on its bank loans. Also, the corporation paid 25,000 in the form of dividends to its own common stockholders.

Calculate the corporation tax liability.

The corporate tax rates are listed here:

15% $0-$50,000

25% $50,001-$75,000

34% $75,001-$10,000,000

35% over $10,000,000

Answer:

Sandersen Inc.

Computation of the Corporation's Tax Liability:

Taxable profit = $350,000

15% $0-$50,000 $7,500 ($50,000 * 15%)

25% $50,001-$75,000 6,250 ($25,000 * 25%)

34% $75,001-$10,000,000 93,500 ($275,000 * 34%)

35% over $10,000,000 0

Total Tax Liability = $107,250

Explanation:

Data and Calculations:

Sales Revenue $3,000,000

Cost of goods sold 2,000,000

Gross profit $1,000,000

Operating expenses 400,000

Depreciation expense 100,000

Operating profit $500,000

Interest expense 150,000

Profit before taxes $350,000

Income Taxes 107,250

Profit after taxes $242,750

Dividend 25,000

Retained Earnings $217,750

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______________ is/are an example of a detective control. a. Physical access controls b. Encryption c. Log analysis d. Emergency response teams

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Answer:

Explanation:

Detective Control: An accounting term used to find problems within a company's processes

Log Analysis is a computer management system that logs records. This log analysis records everything, so if there is an ongoing problem, it will be recorded. Once its recorded and known, a solution can be provided.

Vilas Company is considering a capital investment of $183,600 in additional productive facilities. The new machinery is expected to have a useful life of 5 years with no salvage value. Depreciation is by the straight-line method. During the life of the investment, annual net income and net annual cash flows are expected to be $10,557 and $51,000, respectively. Vilas has a 12% cost of capital rate, which is the required rate of return on the investment.Required:
a. Compute the cash payback period. (Round answer to 1 decimal place, e.g. 10.5.)
b. Compute the annual rate of return on the proposed capital expenditure. (Round answer to 2 decimal places, e.g. 10.52%)
c. Using the discounted cash flow technique, compute the net present value.

Answers

Answer:

Payback period = 3.6 years

Annual rate of return = 11.50%

NPV = 243.59

Explanation:

The payback period: The estimated number of years it will take the initial cost to be recouped.

Payback period= initial cost/ Net cash inflow

= 183,600/51,000

= 3.6 years

Annual rate of return is the average annual income as a percentage of average investment

Annual rate of return = annual net income/ average investment

Average investment =( Initial,cost + scrap value)/2

= (183,600 + 0)/2 = 91,800

Annual rate of return = (10,557/91,800)× 100

= 11.50%

Net Present Value = The present value of cash inflow less the initial cost

PV of cash inflow = A × (1- (1+r)^(-n))/r

= 51,000 × (1- (1.12)^(-5)/0.12

= 183,843.59

NPV = 183,843.59 - 183,600

= 243.59

Plastics, Inc. and Joe's Canoe Shack both operate businesses located on the river. Plastics, Inc. dumps pollution into the river, which results in fewer canoe rentals for Joe. The marginal cost of cleaning up the pollution is $40,000 for Plastics, Inc. Joe estimates a reduction in pollution will lead to a marginal benefit of $27,000.1. If Joe owns the rights to the river, which of the following is the most likely outcome?

a. Plastics will pay Joe $32000 to pollute.
b. Joe will pay Plastics $32000 not to pollute.
c. Joe will enforce his property rights and not allow Plastics to pollute.
d. Plastics will use its property rights to continue polluting.

2. If Plastics, Inc. owns the rights to the river, which of the following is the most likely outcome?
a. Plastics will pay Joe $32000 to pollute.
b. Joe will pay Plastics $32000 not to pollute.
c. Joe will enforce his property rights and not allow Plastics to pollute.
d. Plastics will use its property rights to continue polluting.

Answers

If Joe owns the rights to the river will enforce his property rights and not allow Plastics to pollute and clean the pollution. Plastic is breaking his rights on the river

In this scenario Joe has benefit for 20,000

and Plastic losses for 12,000

2.- If Plastic own the rights to the river Joe will pay Plastics $15,000 to not pollute. This will make Plastic earn money for cleaning the river and Joe gain 5,000 incremental benefit

Explanation:

(A) Joe has legal claims, so It will used before any economic options

(B) Joe doesn't have legal claims, but It notices that a good offer make both parties win.

Plastic will receive 15,000 dollars to clean the river, which has cost of 12,000 realizing a net gain of 3,000

While Joe estimated a marginal benefit of 5,000 after paying to Plastic to clean the river, (20,000 benefit - 15,000 cost

First one is b

Second one is a

Jamison Company had sales revenue and operating expenses of $5,000,000 and $4,200,000, respectively, for the year just ended. If invested capital amounted to $6,000,000, the firm's ROI was:_________ A. 13.33%.
B. 83.33%.
C. 120.00%.
D. 750.00%.

Answers

Answer:

A,. 13.33%.

Explanation:

Return on Investment (ROI) which gives the efficiency of a particular investment

We were given invested capital amounted as $6,000,000, and operating expenses as $5,000,000

We can calculate net income by substracing equal sales revenue from operating expenses

net income can be calculated as = ($5000000-$420000)

= $800000

ROI can be calculated as

net income/Capital investment

$800000/$6000000

=. 13.33%.

Toys "R" Us has decreased its receivable turnover over the last three years: which of the following may be a possible cause of this decrease? A) the company has been more selective in choosing reliable customers. B) salesmen have granted customers an extension of credit terms. C) the accounting department has increased the allowance for doubtful accounts. D) all of the above are correct

Answers

Answer:

B) salesmen have granted customers an extension of credit terms.

Explanation:

receivables turnover ratio = net sales / average accounts receivable

A low receivables turnover ratio is usually a bad thing, since most companies sell on credit, i.e. their accounts receivable should be important. A high receivables turnover ratio means that the company is collecting its accounts receivable efficiently and its customers are good payers.

The key point here is average accounts receivable. What can result in a company having very high accounts receivable (compared to its total sales)? The answer is simple, their customers are not paying on time or the company had to extend their credit terms in order to attract more customers.

Wren Pork Company uses the relative market value method/Value basis method of allocating joint costs in its production of pork products. Relevant information for the current period follows:Product Pounds Price/lb.
Loin chops 3,080 $5.40
Ground 10,200 2.20
Ribs 4,120 5.05
Bacon 6,160 3.70
The total joint cost for the current period was $45,400. How much of this cost should Wren Pork allocate to Loin chops?
A. $0.
B. $6,443.
C. $9,134.
D. $11,350.
E. $45,400.