Under the tax benefit rule, $ of the state income tax refund is included in gross income in 2017.Myrna and Geoffrey filed a joint tax return in 2016. Their AGI was $97,325, and itemized deductions were $21,200, which included $16,960 in state income tax. In 2017, they received a $10,176 refund of the state income taxes that they paid in 2016. The standard deduction for married filing jointly in 2016 was $12,600.
Under the tax benefit rule, $ of the state income tax refund is included in gross income in 2017.
In: Accounting
use the Incomes Statement and EOY Balance Sheet line items in the table below for questions 1-6:
| (in USD millions) | December-16 | December-17 |
| Sales | 8000 | 10000 |
| Operating Income | 1600 | 2000 |
| Net Income | 600 | 800 |
| Cash | 1100 | 1300 |
| Marketable Securities | 100 | 300 |
| Accounts Payable | 600 | 800 |
| Accounts Receivable | 800 | 900 |
| Current portion of LT Debt | 300 | 100 |
| Inventory | 500 | 600 |
| Gross PPE | 3000 | 3300 |
| Net PPE | 2500 | 2700 |
| Long Term Debt | 2100 | 2400 |
| Interest Expense | 800 | 900 |
| Dividends | 150 | 250 |
| Shares Issued (Repurchased) | (50) | (50) |
1. Use End of Year (EOY) balances to compare fiscal year 2017 to fiscal year 2016.According to Dupont’s ROE, which of the following statements is most likely FALSE?
a. The company’s capital structure had more debt in 2017 as compared to 2016
b. The company had more sales per dollar of total assets in 2017 as compared to 2016
c. The company had the same operating margin in 2017 as compared to 2016
d. The company had a better tax burden ratio in 2017 as compared to 2016
e. The company had a worse interest burden ratio in 2017 as compared to 2016
In: Finance
Deferred Tax Calculations (Appendix)
Wyhowski Inc. reported income from operations, before taxes, for 2015-2017 as follows:
| 2015 | $394,000 |
| 2016 | 451,000 |
| 2017 | 528,000 |
When calculating income, Wyhowski deducted depreciation on plant equipment. The equipment was purchased January 1, 2015, at a cost of $164,000. The equipment is expected to last three years and have a(n) $14,000 salvage value. Wyhowski uses straight-line depreciation for book purposes. For tax purposes, depreciation on the equipment is $94,000 in 2015, $38,000 in 2016, and $18,000 in 2017. Wyhowski's tax rate is 35%.
Required:
Enter all amounts as positive numbers.
1. How much did Wyhowski pay in income tax each year? If required, round all calculations to the nearest dollar.
| Year | Taxes Paid |
| 2015 | $ |
| 2016 | $ |
| 2017 | $ |
2. How much income tax expense did Wyhowski record each year?
| Year | Income Tax Expense |
| 2015 | $ |
| 2016 | $ |
| 2017 | $ |
3. What is the balance in the Deferred Income Tax account at the end of 2015, 2016, and 2017? If your answer is zero, enter "0". If required, round all calculations to the nearest dollar.
| Year | Balance | Debit or Credit |
| 2015 | $ | Credit |
| 2016 | $ | Credit
Correct |
| 2017 | $ | No balance |
In: Accounting
Deferred Tax Calculations (Appendix)
Wyhowski Inc. reported income from operations, before taxes, for 2015-2017 as follows:
| 2015 | $473,000 |
| 2016 | 541,000 |
| 2017 | 634,000 |
When calculating income, Wyhowski deducted depreciation on plant equipment. The equipment was purchased January 1, 2015, at a cost of $196,000. The equipment is expected to last three years and have a(n) $16,000 salvage value. Wyhowski uses straight-line depreciation for book purposes. For tax purposes, depreciation on the equipment is $113,000 in 2015, $45,000 in 2016, and $22,000 in 2017. Wyhowski's tax rate is 35%.
Required:
Enter all amounts as positive numbers.
1. How much did Wyhowski pay in income tax each year? If required, round all calculations to the nearest dollar.
| Year | Taxes Paid |
| 2015 | $ |
| 2016 | $ |
| 2017 | $ |
2. How much income tax expense did Wyhowski record each year?
| Year | Income Tax Expense |
| 2015 | $ |
| 2016 | $ |
| 2017 | $ |
3. What is the balance in the Deferred Income Tax account at the end of 2015, 2016, and 2017? If your answer is zero, enter "0". If required, round all calculations to the nearest dollar.
| Year | Balance | Debit or Credit |
| 2015 | $ | Credit |
| 2016 | $ | Credit |
| 2017 | $ | No balance |
In: Accounting
Exercise 19-18 Larkspur Inc., in its first year of operations, has the following differences between the book basis and tax basis of its assets and liabilities at the end of 2016. Book Basis Tax Basis Equipment (net) $367,000 $306,000 Estimated warranty liability $191,000 $ 0 It is estimated that the warranty liability will be settled in 2017. The difference in equipment (net) will result in taxable amounts of $18,700 in 2017, $31,500 in 2018, and $10,800 in 2019. The company has taxable income of $497,000 in 2016. As of the beginning of 2016, the enacted tax rate is 34% for 2016–2018, and 30% for 2019. Larkspur expects to report taxable income through 2019. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2016. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit Income Tax Expense Deferred Tax Asset Income Tax Payable 168980 Deferred Tax Liability SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT Indicate how deferred income taxes will be reported on the balance sheet at the end of 2016. Larkspur Inc. Balance Sheet Deferred Tax Asset $
In: Accounting
|
Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,750,000. The project began in 2016 and was completed in 2017. Data relating to the contract are summarized below: |
| 2016 | 2017 | |||||
| Costs incurred during the year | $ | 360,000 | $ | 2,155,000 | ||
| Estimated costs to complete as of 12/31 | 1,440,000 | 0 | ||||
| Billings during the year | 500,000 | 1,770,000 | ||||
| Cash collections during the year | 280,000 | 1,825,000 | ||||
| Required: |
| 1. |
Compute the amount of revenue and gross profit or loss to be recognized in 2016 and 2017 assuming Nortel recognizes revenue over time according to percentage of completion. (Use percentages as calculated and rounded in the table below to arrive at your final answer. Losses and expenses should be indicated with a minus sign.) |
| 2. |
Compute the amount of revenue and gross profit or loss to be recognized in 2016 and 2017 assuming this project does not qualify for revenue recognition over time. |
| 3. |
Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2016 assuming Nortel recognizes revenue over time according to percentage of completion. |
| 4. |
Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2016 assuming this project does not qualify for revenue recognition over time. |
In: Accounting
Take‐home portion:
Assume XYZ uses a calendar year for financial reporting. The company is authorized to issue 32,500,000 shares of $1 par common stock. Listed below is a summary of XYZ’s common stock activities.
|
2,600,000 |
|
780,000 |
|
1,625,000 |
|
5,005,000 |
1-Number of common shares issued and outstanding at December 31, 2014
2-Shares issued as a result of a 30% stock dividend on Sept. 1, 2015
3-Shares issued for cash on June 30, 2016
Number of common shares issued and outstanding at December 31, 2016
4-A 2-for-1 stock split of XYZ’s common stock took place on Oct. 1, 2017
Instructions:
A)Compute the weighted average number of common shares to be used in computing earnings per common share for 2015 on the 2016 comparative income statement.
B) Compute the weighted average number of common shares to be used in computing earnings per common share for 2016 on the 2016 comparative income statement.
Compute the weighted average number of common shares to be used in computing earnings per common share for 2016 on the 2017 comparative income statement.
Compute the weighted average number of common shares to be used in computing earnings per common share for 2017 on the 2017 comparative income statement.
In: Accounting
Assume XYZ uses a calendar year for financial reporting. The company is authorized to issue 32,500,000 shares of $1 par common stock. Listed below is a summary of XYZ’s common stock activities.
|
2,600,000 |
|
780,000 |
|
1,625,000 |
|
5,005,000 |
1-Number of common shares issued and outstanding at December 31, 2014
2-Shares issued as a result of a 30% stock dividend on Sept. 1, 2015
3-Shares issued for cash on June 30, 2016
Number of common shares issued and outstanding at December 31, 2016
4-A 2-for-1 stock split of XYZ’s common stock took place on Oct. 1, 2017
Instructions:
A)Compute the weighted average number of common shares to be used in computing earnings per common share for 2015 on the 2016 comparative income statement.
B) Compute the weighted average number of common shares to be used in computing earnings per common share for 2016 on the 2016 comparative income statement.
C) Compute the weighted average number of common shares to be used in computing earnings per common share for 2016 on the 2017 comparative income statement.
D)Compute the weighted average number of common shares to be used in computing earnings per common share for 2017 on the 2017 comparative income statement.
In: Accounting
Assume XYZ uses a calendar year for financial reporting. The company is authorized to issue 32,500,000 shares of $1 par common stock. Listed below is a summary of XYZ’s common stock activities.
|
2,600,000 |
|
780,000 |
|
1,625,000 |
|
5,005,000 |
1-Number of common shares issued and outstanding at December 31, 2014
2-Shares issued as a result of a 30% stock dividend on Sept. 1, 2015
3-Shares issued for cash on June 30, 2016
Number of common shares issued and outstanding at December 31, 2016
4-A 2-for-1 stock split of XYZ’s common stock took place on Oct. 1, 2017
Instructions:
A)Compute the weighted average number of common shares to be used in computing earnings per common share for 2015 on the 2016 comparative income statement.
B) Compute the weighted average number of common shares to be used in computing earnings per common share for 2016 on the 2016 comparative income statement.
Compute the weighted average number of common shares to be used in computing earnings per common share for 2016 on the 2017 comparative income statement.
Compute the weighted average number of common shares to be used in computing earnings per common share for 2017 on the 2017 comparative income statement.
In: Accounting
|
Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,650,000. The project began in 2016 and was completed in 2017. Data relating to the contract are summarized below: |
| 2016 | 2017 | |||||
| Costs incurred during the year | $ | 352,000 | $ | 2,025,000 | ||
| Estimated costs to complete as of 12/31 | 1,408,000 | 0 | ||||
| Billings during the year | 470,000 | 1,750,000 | ||||
| Cash collections during the year | 276,000 | 1,815,000 | ||||
| Required: |
| 1. |
Compute the amount of revenue and gross profit or loss to be recognized in 2016 and 2017 assuming Nortel recognizes revenue over time according to percentage of completion. (Use percentages as calculated and rounded in the table below to arrive at your final answer. Losses and expenses should be indicated with a minus sign.) |
| 2. |
Compute the amount of revenue and gross profit or loss to be recognized in 2016 and 2017 assuming this project does not qualify for revenue recognition over time. |
| 3. |
Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2016 assuming Nortel recognizes revenue over time according to percentage of completion. |
| 4. |
Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2016 assuming this project does not qualify for revenue recognition over time. |
In: Accounting