Marc and Michelle are married and earned salaries this year of $67,600 and $13,350, respectively. In addition to their salaries, they received interest of $350 from municipal bonds and $950 from corporate bonds. Marc contributed $2,950 to an individual retirement account, and Marc paid alimony to a prior spouse in the amount of $1,950. Marc and Michelle have a 10-year-old son, Matthew, who lived with them throughout the entire year. Thus, Marc and Michelle are allowed to claim a $2,000 child tax credit for Matthew. Marc and Michelle paid $6,900 of expenditures that qualify as itemized deductions and they had a total of $5,950 in federal income taxes withheld from their paychecks during the course of the year. (Use the tax rate schedules.)
a. What is Marc and Michelle’s gross income?
b. What is Marc and Michelle’s adjusted gross income?
c. What is the total amount of Marc and Michelle’s deductions from AGI?
d. What is Marc and Michelle’s taxable income?
e. What is Marc and Michelle’s taxes payable or refund due for the year?
In: Accounting
The budgeting process for a midwestern college resulted in
expense forecasts for the coming year (in $ millions) of $9, $10,
$11, $12, and $13. Because the actual expenses are unknown, the
following respective probabilities are assigned: 0.29, 0.17, 0.25,
0.07, and 0.22.
| x | f(x) |
| 9 | |
| 10 | |
| 11 | |
| 12 | |
| 13 |
In: Math
a. The changes in account balances of the Samson Corporation
during the year are presented below:
Assets
$356,000
Liabilities
108,000
Capital
stock
240,000
Additional paid-in
capital
24,000
Assuming there are no charges to retained earnings other than for a
dividend payment of $52,000, the net income for the year, should
be
|
$16,000 |
||
|
$36,000 |
||
|
$52,000 |
||
|
$68,000 |
b. Which of the following is not a discontinued account in the income statement?
|
Extraordinary account |
||
|
Unusual or in frequent account |
||
|
Income from discontinued business |
||
|
Impact of accounting changes |
c. United Airlines’ 2016 balance sheet reported the following
(in millions)
Total Assets
$40,091
Total Liabilities
31,485
Contributed Capital 3,573
What was United Airlines’ total liabilities and stockholders’
equity at December 31, 2016?
|
$36,518 million |
||
|
$40,091 million |
||
|
$35,058 million |
||
|
$8,606million |
In: Accounting
For 20Y2, McDade Company reported a decline in net income. At the end of the year, T. Burrows, the president, is presented with the following condensed comparative income statement:
|
McDade Company |
|
Comparative Income Statement |
|
For the Years Ended December 31, 20Y2 and 20Y1 |
|
1 |
20Y2 |
20Y1 |
|
|
2 |
Sales |
$7,750,400.00 |
$6,920,000.00 |
|
3 |
Cost of goods sold |
2,791,067.00 |
2,306,667.00 |
|
4 |
Gross profit |
$4,959,333.00 |
$4,613,333.00 |
|
5 |
Selling expenses |
$1,187,500.00 |
$950,000.00 |
|
6 |
Administrative expenses |
701,100.00 |
570,000.00 |
|
7 |
Total operating expenses |
$1,888,600.00 |
$1,520,000.00 |
|
8 |
Income from operations |
$3,070,733.00 |
$3,093,333.00 |
|
9 |
Other income |
134,400.00 |
120,000.00 |
|
10 |
Income before income tax |
$3,205,133.00 |
$3,213,333.00 |
|
11 |
Income tax expense |
60,000.00 |
50,000.00 |
|
12 |
Net income |
$3,145,133.00 |
$3,163,333.00 |
| 1. | Prepare a comparative income statement with horizontal analysis for the two-year period, using 20Y1 as the base year. Use the minus sign to indicate an amount or percent decrease. If required, round percentages to one decimal place. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2. |
To the extent the data permit, comment on the significant relationships revealed by the horizontal analysis prepared in (1). Prepare a comparative income statement with horizontal analysis for the two-year period, using 20Y1 as the base year. Use the minus sign to indicate an amount or percent decrease. If required, round percentages to one decimal place. Score: 0/77
|
In: Accounting
Molly and Mark are wife and husband and earned salaries this year of $12,000 and $64,000, respectively. In addition to their salaries, they received interest of $350 from municipal bonds and $500 from corporate bonds. Mark and Molly also paid $2,500 of qualifying moving expenses, and Marc paid alimony to a prior spouse in the amount of $1,500. Mark and Molly have a 10-year-old son, Matt, who lived with them throughout the entire year. Thus, Marc and Michelle are allowed to claim a $1,000 child tax credit for Matt. Mark and Molly paid $6,000 of expenditures that qualify as itemized deductions and they had a total of $5,500 in federal income taxes withheld from their paychecks during the course of the year. What is Molly and Mark’s gross income? What is Molly and Mark’s adjusted gross income? What is the total amount of Molly and Mark’s deductions from AGI? What is Molly and Mark’s taxable income? What is Molly and Mark’s taxes payable or refund due for the year (use the tax rate schedules)? Complete the first two pages of Molly and Mark’s Form 1040 (download forms from the IRS website). 2018 TAX LAW
In: Accounting
This year Drake and his son purchased real estate for an investment. The price of the property was $1,200,000, and the title named Drake and his son as joint tenants with the right of survivorship. Drake provided $900,000 of the purchase price and his son provided the remaining $300,000. What is the amount of the taxable gift?
$300,000.
Incorrect$600,000.
$285,000.
$1,200,000.
None of the choices are correct - Drake did not make a taxable gift.
In: Accounting
What is the duration of a 2 year bond that pays a 5% annual coupon with a 9% YTM? Use $1000 as the face value of the bond. Using the duration, what is the expected change in the bond if rates are expected to drop by 25 basis points?
In: Finance
The possibility of a power outage seems to grow every year because of demand and an aging infrastructure. What can/should companies do to mitigate this risk?
In: Accounting
Molly and Mark are wife and husband and earned salaries this year of $12,000 and $64,000, respectively. In addition to their salaries, they received interest of $350 from municipal bonds and $500 from corporate bonds. Mark and Molly also paid $2,500 of qualifying moving expenses, and Marc paid alimony to a prior spouse in the amount of $1,500. Mark and Molly have a 10-year-old son, Matt, who lived with them throughout the entire year. Thus, Marc and Michelle are allowed to claim a $1,000 child tax credit for Matt. Mark and Molly paid $6,000 of expenditures that qualify as itemized deductions and they had a total of $5,500 in federal income taxes withheld from their paychecks during the course of the year. What is Molly and Mark’s gross income? What is Molly and Mark’s adjusted gross income? What is the total amount of Molly and Mark’s deductions from AGI? What is Molly and Mark’s taxable income? What is Molly and Mark’s taxes payable or refund due for the year (use the tax rate schedules)? Complete the first two pages of Molly and Mark’s Form 1040 (download forms from the IRS website). 2018 TAX LAW
In: Accounting
Suppose that a company is considering an investment in a new
product with a 5-year horizon (product will be sold for 5 years).
The upfront investment is $1 million and it is assumed to
depreciate on a straight-line basis for 5 years, with no residual
value. Fixed costs are assumed to be $50,000 per year. The company
estimates the variable cost per unit (v) to be $5 and expects to
sell each unit for $15. There are no taxes and the required rate of
return is 8% per year.
The company estimates that they will be able to sell 32,000 units
during the year under normal circumstances (base case), but they
believe that actual sales could be 10% lower than 32,000 (worst
case) or 10% higher than 32,000 (best case).
Base Case NPV =
Worst Case NPV =
Best Case NPV =
In: Finance