The Commonwealth of Massachusetts, seeking additional tax revenues plans to levy an additional tax on all pizza. The state legislature offers the governor two alternative tax plans to select from. The first plan calls for a $1.00 per pizza tax and the second plan calls for a tax based on a rate of 11 percent of total revenue from pizza sales. As manager of the Massachusetts division of Ian Pizza you must decide which plan to lobby for. Assume the tax is inevitable and the objective of the company is to still maximize revenues. Now, however, revenues are net revenues. Net revenues are total revenue minus the firm’s tax bill.
a. What will be the company’s net revenues under the flat tax plan?
b. What will be the company’s net revenues under the 11 percent tax plan?
c. Based on your findings in parts (a) and (b) above which plan is best for Ian pizza?
In: Economics
Vanderhyde Kennel uses tenant-days as its measure of activity;
an animal housed in the kennel for one day is counted as one
tenant-day. During May, the kennel budgeted for 3,330 tenant-days,
but its actual level of activity was 3,373 tenant-days. The kennel
has provided the following data concerning the formulas used in its
budgeting and its actual results for May:
Data used in budgeting:
| Fixed element per month | Variable element per tenant-day | |||||
| Revenue | − | $ | 39.00 | |||
| Wages and salaries | $ | 3,800 | $ | 7.50 | ||
| Food and supplies | 2,020 | 13.90 | ||||
| Facility expenses | 10,200 | 5.30 | ||||
| Administrative expenses | 10,000 | 1.00 | ||||
| Total expenses | $ | 26,020 | $ | 27.70 | ||
Actual results for May:
| Revenue | $ | 135,747 | |
| Wages and salaries | $ | 30,413 | |
| Foods and supplies | $ | 47,590 | |
| Facility expenses | $ | 27,067 | |
| Administrative expenses | $ | 13,108 | |
The net operating income in the planning budget for May would be
closest to:
$12,025
$11,609
$17,614
$18,078
In: Accounting
In: Economics
Otay Lakes Park is a private camping ground near the Mount Miguel Recreation Area. It has compiled the following financial information as of December 31, 2017.
|
Service revenue (from camping fees) |
$132,000 |
Dividends |
$ 9,000 |
|
Sales revenue (from general store) |
25,000 |
Notes payable |
50,000 |
|
Accounts payable |
11,000 |
Expenses during 2017 |
126,000 |
|
Cash |
8,500 |
Supplies |
5,500 |
|
Equipment |
114,000 |
Common stock |
40,000 |
|
Retained earnings (1/1/2017) |
5,000 |
Instructions
(a)
Determine Otay Lakes Park's net income for 2017.
(b)
Prepare a retained earnings statement and a balance sheet for Otay Lakes Park as of December 31, 2017.
(c)
Upon seeing this income statement, Walt Jones, the campground manager, immediately concluded, “The general store is more trouble than it is worth—let's get rid of it.” The marketing director isn't so sure this is a good idea. What do you think?
In: Accounting
The following information was taken from the records of Bridgeport Inc. for the year 2017: Income tax applicable to income from continuing operations $206,448; income tax applicable to loss on discontinued operations $27,336, and unrealized holding gain on available-for-sale securities (net of tax) $23,700.
|
Gain on sale of equipment |
$97,700 |
Cash dividends declared |
$139,500 |
|||
|
Loss on discontinued operations |
80,400 |
Retained earnings January 1, 2017 |
611,500 |
|||
|
Administrative expenses |
244,100 |
Cost of goods sold |
933,800 |
|||
|
Rent revenue |
44,200 |
Selling expenses |
277,800 |
|||
|
Loss on write-down of inventory |
60,600 |
Sales Revenue |
1,981,600 |
Shares outstanding during 2017 were 109,300.
(a) Prepare a multiple-step income statement. (Round earnings per share to 2 decimal places, e.g. 1.48.)
b) prepare a comprehensive income statement for 2017, using the two statement format.
c) prepare a retained earnings statement, or 2017.
In: Accounting
Assume that Ocean King Products sells three varieties of canned seafood with the following prices and costs:
| Selling Price per Case |
Variable Cost per Case |
Fixed Cost per Month |
|||||||
| Variety 1 | $ | 5 | $ | 4 | – | ||||
| Variety 2 | 7 | 5 | – | ||||||
| Variety 3 | 12 | 8 | – | ||||||
| Entire firm | – | – | $ | 46,600 | |||||
The sales mix (in cases) is 60 percent Variety 1, 25 percent Variety 2, and 15 percent Variety 3.
Required:
a. At what sales revenue per month does the company break even? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar.)
b. Suppose the company is subject to a 35 percent tax rate on income. At what sales revenue per month will the company earn $42,640 after taxes assuming the same sales mix? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar.)
In: Accounting
Trevorrow Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During June, the company budgeted for 5,800 units, but its actual level of activity was 5,760 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for June:
Data used in budgeting:
| Fixed element per month | Variable element per unit | ||||
| Revenue | - | $ | 29.20 | ||
| Direct labor | $ | 0 | $ | 3.80 | |
| Direct materials | 0 | 9.90 | |||
| Manufacturing overhead | 38,900 | 1.50 | |||
| Selling and administrative expenses | 24,500 | 0.30 | |||
| Total expenses | $ | 63,400 | $ | 15.50 | |
Actual results for June:
| Revenue | $ | 170,258 |
| Direct labor | $ | 21,347 |
| Direct materials | $ | 54,759 |
| Manufacturing overhead | $ | 47,430 |
| Selling and administrative expenses | $ | 26,268 |
The activity variance for net operating income in June would be closest to:
Multiple Choice
$548 F
$548 U
$4,394 U
$4,394 F
In: Accounting
Guareno Clinic uses client-visits as its measure of activity. During December, the clinic budgeted for 4,500 client-visits, but its actual level of activity was 4,430 client-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for December:
Data used in budgeting:
| Fixed element per month | Variable element per client-visit | ||||
| Revenue | - | $ | 45.10 | ||
| Personnel expenses | $ | 36,300 | $ | 13.70 | |
| Medical supplies | 2,000 | 5.70 | |||
| Occupancy expenses | 12,000 | 1.80 | |||
| Administrative expenses | 5,800 | 0.30 | |||
| Total expenses | $ | 56,100 | $ | 21.50 | |
Actual results for December:
| Revenue | $ | 198,505 | |
| Personnel expenses | $ | 95,975 | |
| Medical supplies | $ | 26,775 | |
| Occupancy expenses | $ | 19,420 | |
| Administrative expenses | $ | 7,255 | |
The activity variance for administrative expenses in December would be closest to:
Multiple Choice
$21 U
$105 F
$105 U
$21 F
In: Accounting
In order to submit this assignment, you will use this webform to upload a document file (.doc) or (.docx) with your answers. You may use a drawing program or sketch by hand. Be sure that your responses model clear economic reasoning and addresses each of the following: 1.) Suppose if the price of a good is $12, the quantity demanded is 50 units; when the price is $10, the quantity demanded is 100 units. Use the midpoint approach to compute the price elasticity of demand. Is demand at this point relatively responsive or relatively unresponsive to price changes? 2.) For this exercise you will need to first build a graph to these specifications: Draw a downward sloping demand curve with vertical intercept (0,4) and horizontal intercept (8,0). Label the price above which the demand is always elastic. Label the portion of the curve at which a decrease in price will lead to increased revenue. If the price is currently $3, will revenue rise or fall if price drops to $2?
In: Economics
|
Addison Corporation is currently going through a Chapter 11 bankruptcy. The company has the following account balances for the current year. |
|
Debit |
Credit |
|||
|
Advertising expense |
$ |
39,000 |
||
|
Cost of goods sold |
226,000 |
|||
|
Depreciation expense |
37,000 |
|||
|
Interest expense |
3,000 |
|||
|
Interest revenue |
$ |
37,000 |
||
|
Loss on closing of branch |
124,000 |
|||
|
Professional fees |
86,000 |
|||
|
Rent expense |
31,000 |
|||
|
Revenues |
572,000 |
|||
|
Salaries expense |
85,000 |
|||
|
Prepare an income statement for this organization. The effective tax rate is 30 percent (realization of any tax benefits is anticipated). (Negative amounts under "Reorganization items" should be indicated by a minus sign.) |
The income statement is broken into
Cost and expenses
Earnings before reorganization items and tax effects and Reorganizations items
List of Accounts include
Advertising expense
Cost of goods sold
Depreciation expense
Income tax benefit
Interest expense
Interest revenue
Loss on closing of branch
Professional fees
Rent expense
Revenues
Salaries
In: Accounting