Flounder Company, which is subject to a 40% income tax rate, projected its income before taxes...

Flounder Company, which is subject to a 40% income tax rate, projected its income before taxes for next year as shown here:

Sales (272,000 units)		$13,600,000
Cost of sales
	Variable costs	3,400,000
	Fixed costs	5,100,000
Pretax earning		$5,100,000

1) If Flounder wants $7,650,000 in pretax earning, what is the required level of sales, in dollars?

2) If Flounder’s net assets are $61,200,000, what amount of revenue must be achieved for Flounder to earn a 10% after-tax return on assets?

3) If Flounder wants after-tax earnings of 30% of sales, what is the required level of sales in dollars and in units?

Solutions

Expert Solution

ekkarill92 answered 4 months ago

Next > < Previous

Related Solutions

The projected income before tax is?

A family friend, Mr. Burn Out availed of the early retirement scheme offered by his employer. He said that he was already tired of the same routine of spending eight full hours in an office doing the same thing for the last twenty years. Mr. Burn Out plans to get into the field of entrepreneurship. He would invest part of his retirement pay in a business that would deal with the sale of medical supplies to local clinics and hospitals....

Oriole Company reported the following on its income statement: Income before income taxes $730000 Income tax...

Oriole Company reported the following on its income statement: Income before income taxes $730000 Income tax expense 270000 Net income $460000 An analysis of the income statement revealed that interest expense was $100000. Oriole Company's times interest earned was

Magna Corp. reported earnings before income taxes of $2,700,000 in 20X9 when the tax rate was...

Magna Corp. reported earnings before income taxes of $2,700,000 in 20X9 when the tax rate was 40%. Additional information for the company for 20X9 is as follows: a. Golf club dues, $32,000 b. Depreciation expense, $63,000 c. Development costs incurred during year; capitalized for accounting purposes, $160,000 d. Warranty costs accrued during year, $36,000 e. Interest and penalty for late payment of payroll taxes, $40,000 f. CCA, $300,000 g. Amortization of capitalized development costs, $16,000 h. Costs incurred during year...

If the tax rate is 40 percent, compute the before-tax real interest rate and the after-tax...

If the tax rate is 40 percent, compute the before-tax real interest rate and the after-tax real interest rate. (answer in percentages. If whole percentages, do not need decimals. If have decimals, round to nearest hundredth of percent) Show all steps clearly assume multiplying percentages by $100 before-tax real interest rate = nominal interest rate - inflation rate reduction in nominal interest = nominal interest rate multiplied by tax rate after-tax nominal interest rate = nominal interest rate - reduction...

Zekany Corporation would have had identical income before taxes on both its income tax returns and...

Zekany Corporation would have had identical income before taxes on both its income tax returns and income statements for the years 2018 through 2021 except for differences in depreciation on an operational asset. The asset is purchased in 2018 at a cost of $120,000 and is depreciated fully for income tax purposes in 2018. The operational asset has a four-year life and no residual value. The straight-line method is used for financial reporting purposes. Pretax accounting income amounts for each...

Zekany Corporation would have had identical income before taxes on both its income tax returns and...

Zekany Corporation would have had identical income before taxes on both its income tax returns and income statements for the years 2021 through 2024 except for differences in depreciation on an operational asset. The asset cost $270,000 and is depreciated for income tax purposes in the following amounts: 2021 $ 89,100 2022 118,800 2023 40,500 2024 21,600 The operational asset has a four-year life and no residual value. The straight-line method is used for financial reporting purposes. Income amounts before...

Zekany Corporation would have had identical income before taxes on both its income tax returns and...

Zekany Corporation would have had identical income before taxes on both its income tax returns and income statements for the years 2018 through 2021 except for differences in depreciation on an operational asset. The asset cost $200,000 and is depreciated for income tax purposes in the following amounts: 2018 $ 66,000 2019 88,000 2020 30,000 2021 16,000 The operational asset has a four-year life and no residual value. The straight-line method is used for financial reporting purposes. Income amounts before...

Zekany Corporation would have had identical income before taxes on both its income tax returns and...

Zekany Corporation would have had identical income before taxes on both its income tax returns and income statements for the years 2018 through 2021 except for differences in depreciation on an operational asset. The asset cost $280,000 and is depreciated for income tax purposes in the following amounts: 2018 $ 92,400 2019 123,200 2020 42,000 2021 22,400 The operational asset has a four-year life and no residual value. The straight-line method is used for financial reporting purposes. Income amounts before...

Zekany Corporation would have had identical income before taxes on both its income tax returns and...

Zekany Corporation would have had identical income before taxes on both its income tax returns and income statements for the years 2016 through 2019 except for differences in depreciation on an operational asset. The asset cost $300,000 and is depreciated for income tax purposes in the following amounts: 2016 $ 99,000 2017 132,000 2018 45,000 2019 24,000 The operational asset has a four-year life and no residual value. The straight-line method is used for financial reporting purposes. Income...

ekany Corporation would have had identical income before taxes on both its income tax returns and...

ekany Corporation would have had identical income before taxes on both its income tax returns and income statements for the years 2021 through 2024 except for differences in depreciation on an operational asset. The asset cost $140,000 and is depreciated for income tax purposes in the following amounts: 2021 $ 46,200 2022 61,600 2023 21,000 2024 11,200 The operational asset has a four-year life and no residual value. The straight-line method is used for financial reporting purposes. Income amounts before...

Subjects