Question
In: Accounting
Chris Inc. has accumulated the following information for its second-quarter income statement for 20X2: Sales $...
Chris Inc. has accumulated the following information for its
second-quarter income statement for 20X2:
| Sales | $ | 864,000 | |
| Cost of goods sold | 434,000 | ||
| Operating expenses | 244,000 | ||
Additional Information
- First-quarter income before taxes was $114,000, and the estimated effective annual tax rate was 40 percent. At the end of the second quarter, expected annual income is $760,000, and a dividend exclusion of $46,000 and a business tax credit of $15,000 are anticipated. The combined state and federal tax rate is 50 percent.
- The $434,000 cost of goods sold is determined by using the LIFO method and includes 7,500 units from the base layer at a cost of $12 per unit. However, you have determined that these units are expected to be replaced at a cost of $26 per unit.
- The operating expenses of $244,000 include a $74,000 factory rearrangement cost incurred in April. You have determined that the second quarter will receive about 25 percent of the benefits from this project with the remainder benefiting the third and fourth quarters.
Required:
a. Calculate the effective annual tax rate expected at the end of
the second quarter for Chris Inc.
b. Prepare the income statement for the second quarter of 20X2.
Your solution should include a computation of income tax (or
benefit):
Solutions
ekkarill92 answered 1 year agoRelated Solutions
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Heely Co. has the following projected sales in units for the
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10373
February
17195
March
12071
Heely Co.’s budget is based on the following assumptions: 36% of
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Bainbridge, Inc. has projected sales and production in units for
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August
September
October
Production
95,000
85,000
70,000
Sales
85,000
75,000
95,000
Cash-related production costs are budgeted at $12 per unit
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ABC Inc. has projected sales and production in units for the second quarter of the coming...
ABC Inc. has projected sales and production in units for the
second quarter of the coming year as follows:
April
May
June
sales.......
50,000
40,000
60,000
production.....
60,000
50,000
50,000
cash related production costs are budgeted at $5 per unit
produced. Of these production costs, 40% are paid in the month in
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Selling and administrative expenses will amount to $100,000 per
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Following are the budgeted income statements for the second quarter of 2016 for SeaTech, Inc.: April...
Following are the
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April
May
June
Sales
$
280,000
$
340,000
$
380,000
Cost of goods
sold*
192,000
228,000
252,000
Gross
profit
$
88,000
$
112,000
$
128,000
Operating
expenses†
44,000
50,000
54,000
Operating
income
$
44,000
$
62,000
$
74,000
* Includes all product costs (i.e., direct
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† Includes
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The company...
Dallas Corporation prepared the following two income statements: First Quarter Second Quarter Sales Revenue $ 17,000...
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Sales Revenue
$
17,000
$
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Cost of Goods Sold
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$
3,400
$
4,400
Purchases
7,400
12,400
Goods Available for Sale
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16,800
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4,400
9,400
Cost of Goods Sold
6,400
7,400
Gross Profit
10,600
13,000
Operating Expenses
5,400
6,400
Income from Operations
$
5,200
$
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$
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$
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$
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Purchases
8,400
13,400
Goods Available for Sale
12,800
18,800
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5,400
10,400
Cost of Goods Sold
7,400
8,400
Gross Profit
14,600
18,000
Operating Expenses
6,400
7,400
Income from Operations
$
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$
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Item
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Current taxes
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Part 1
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August
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October
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85,000
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Cash-related production costs are budgeted at $12 per unit
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