Disregarding any small business exceptions, for the current year, which of the following situations will result in a taxpayer owing a penalty for underpayment of taxes?
a.A married filing joint taxpayer had AGI of $160,000 and total tax of $35,000 in the prior year. For the current year, AGI is $175,000 and total tax is $40,000. He had no withholding in the current year and paid a total of $35,000 in estimated taxes.
b.The taxpayer owes $950 in taxes after his withholding was applied to his current year's tax return.
c.The taxpayer had AGI of $75,000 and total tax of $15,000 in the prior year. For the current year, his AGI is $62,000 and total tax is $12,500. He had no withholding in the current year and paid a total of $11,500 in estimated taxes.
d.The taxpayer had AGI of $100,000 and total tax of $20,000 in the prior year. For the current year, his AGI is also $100,000, but his total tax is $15,000. His withholding amounted to $10,000, and he paid $6,000 in estimated taxes.
In: Accounting
Exercise 14-7 Trend Percentages [LO14-1] Rotorua Products, Ltd., of New Zealand markets agricultural products for the burgeoning Asian consumer market. The company’s current assets, current liabilities, and sales over the last five years (Year 5 is the most recent year) are as follows: Year 1 Year 2 Year 3 Year 4 Year 5 Sales $ 4,542,180 $ 4,808,250 $ 5,080,450 $ 5,484,830 $ 5,683,230 Cash $ 95,706 $ 103,151 $ 102,481 $ 79,325 $ 65,455 Accounts receivable, net 404,163 424,950 436,823 509,990 564,813 Inventory 809,570 877,017 834,956 891,516 912,503 Total current assets $ 1,309,439 $ 1,405,118 $ 1,374,260 $ 1,480,831 $ 1,542,771 Current liabilities $ 301,363 $ 342,540 $ 331,353 $ 321,208 $ 402,975 Required: 1. Express all of the asset, liability, and sales data in trend percentages. Use Year 1 as the base year. (Round your percentage answers to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)
In: Accounting
Grayson Corporation is authorized by the state to sell 2 million shares of its $1 par value common stock to the public. Before Year Seven, the company had issued 60,000 shares for cash of $12 per share. During Year Seven, Grayson issued another 14,000 shares at the market value of $24 per share. On January 1, Year Seven, Grayson reported retained earnings of $1,950,000. During that year, Grayson earned net income of $80,000 and paid cash dividends to common stockholders of $19,000. Also, during December of Year Seven, Grayson repurchased 11,000 shares of its own stock when the market price was $22 per share. a. Record the issuance of the common stock in Year Seven. b. Determine retained earnings as of the end of Year Seven. c. Record the purchase of the treasury stock. d. Prepare the stockholders’ equity section of the balance sheet as of December 31, Year Seven. e. Compute the company’s return on equity (ROE) for Year Seven.
In: Accounting
Comparing three depreciation methods
Dexter Industries purchased packaging equipment on January 8 for $90,000. The equipment was expected to have a useful life of three years, or 18,000 operating hours, and a residual value of $3,600. The equipment was used for 7,200 hours during Year 1, 5,400 hours in Year 2, and 5,400 hours in Year 3.
Required:
1. Determine the amount of depreciation expense for the three years ending December 31, by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the three years by each method. Round the final answers for each year to the nearest whole dollar.
Depreciation Expense
YearStraight-Line MethodUnits-of-Activity MethodDouble-Declining-Balance Method
Year 1 $ $ $
Year 2 $ $ $
Year 3 $ $ $
Total $ $ $
2. What method yields the highest depreciation expense for Year
1?
3. What method yields the most depreciation over the three-year
life of the equipment?
In: Accounting
. Jasper Corp, has the following Stockholders’ Equity account balances and activity for Year 2.
|
Net income |
$14,655,000 |
|||
|
Retained earnings |
$16,500,000 |
|||
|
Preferred stock shares outstanding |
2,000 |
|||
|
Common stock shares outstanding at January 1, Year 2 |
7,375,000 |
|||
|
Additional Common shares issued at July 1, Year 2 |
30,000 |
|||
|
4-for-1 stock split at December 31, Year 2 |
||||
|
Preferred Dividends |
$10,000 |
|||
|
Common Dividends |
$75,000 |
|||
|
Year 1 EPS |
$3.60 |
|||
Earnings per share = __________________ / ___________________* = ________
* Compute Denominator: Weighted average common shares outstanding
|
Date |
Shares |
Portion of year |
Weighted Average Shares |
|
January 1, Y2 |
7,375,000 |
||
|
July 1, Y2 |
|||
|
Weighted Average December 31 before split |
|||
|
Stock split 4-for-1 |
|||
|
*Total Weighted Average, 12/31/Y2 |
|||
|
Note: Year 1 restated |
$3.60 / 4 =_____ |
Is performance better or worse (circle) in Year 2 $ _____ as compared to Year 1 $ _____ ? Why?
In: Accounting
| Turbine | United Hydro Services | Kiser Hydro, LLC |
| Initial Cost | $200,000 | $1,500,000 |
| Maintenance Cost | $200 per year, increasing by 4% per year | $1,000 per year for the first ten years, then $2,000 per year thereafter |
| Overhaul Cost | $50,000 at year ten | $750,000 at year thirty |
| Income | $20,000 per year | $25,000 per year |
| Salvage Value | $15,000 | $50,000 |
| Life | 20 Years | Infinite |
. Memphis Light, Gas and Water Division is exploring the possibility of installing hydrokinetic turbines in the Mississippi River to generate power for the Memphis and Shelby County area. Consulting engineers have identified two potential types of hydrokinetic turbines to meet the needs of MLG&W. The costs and expected income for the two types of turbines are shown in the table below. Using a perpetual annual worth analysis and a MARR of 6% per year, determine which type of hydrokinetic turbine, if any, should be selected. Complete all calculations to the nearest dollar.
In: Economics
A machine can be purchased for $226,000 and used for five years,
yielding the following net incomes. In projecting net incomes,
double-declining depreciation is applied using a five-year life and
a zero salvage value.
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||||||||||||||||
| Net income | $ | 22,500 | $ | 44,000 | $ | 77,000 | $ | 46,000 | $ | 108,000 | ||||||||||
Compute the machine’s payback period (ignore taxes). (Round
payback period answer to 3 decimal places.)
|
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In: Accounting
Listed below are several transactions that took place during the
first two years of operations for the law firm of Pete, Pete, and
Roy.
| Year 1 | Year 2 | |||||
| Amounts billed to clients for services rendered | $ | 184,000 | $ | 234,000 | ||
| Cash collected from clients | 167,000 | 197,000 | ||||
| Cash disbursements | ||||||
| Salaries paid to employees for services rendered during the year | 97,000 | 107,000 | ||||
| Utilities | 33,500 | 47,000 | ||||
| Purchase of insurance policy | 62,100 | 0 | ||||
In addition, you learn that the company incurred utility costs of
$38,500 in year 1, that there were no liabilities at the end of
year 2, no anticipated bad debts on receivables, and that the
insurance policy covers a three-year period.
Required:
1. & 3. Calculate the net
operating cash flow for years 1 and 2 and determine the amount of
receivables from clients that the company would show in its year 1
and year 2 balance sheets prepared according to the accrual
accounting model.
2. Prepare an income statement for each year
according to the accrual accounting model.
In: Accounting
Sauer Food Company has decided to buy a new computer system with
an expected life of three years. The cost is $380,000. The company
can borrow $380,000 for three years at 12 percent annual interest
or for one year at 10 percent annual interest. Assume interest is
paid in full at the end of each year.
a. How much would Sauer Food Company save in interest over the
three-year life of the computer system if the one-year loan is
utilized and the loan is rolled over (reborrowed) each year at the
same 10 percent rate? Compare this to the 12 percent three-year
loan.
10% loan -
12% loan -
Interest Savings -
b. What if interest rates on the 10 percent loan go up to 15 percent in year 2 and 18 percent in year 3? What would be the total interest cost compared to the 12 percent, three-year loan?
Fixed 12% loan -
Variable Rate loan -
Additional Interest Cost -
In: Finance
The following information relates to the Jimmy Johnson Company.
Ending Inventory Ending Inventory
Date At Base-Year Cost At Current Year Cost Price Index
___________________________________________________________________________________________
12/31/15 (base) $68,400 $68,400 1.00
12/31/16 $91,600 $122,744 1.34
12/31/17 $89,800 $132,904 1.48
Using dollar-value LIFO, 2016 ending inventory is?
Using dollar-value LIFO, 2017 ending inventory is?
What is the change in inventory in base-year prices in 2016 (i.e., comparing 2016 ending inventory to 2015 ending inventory, what is the change in base-year, not current year, prices)?
What is the change in inventory in base-year prices in 2017 (i.e., comparing 2017 ending inventory to 2016 ending inventory, what is the change in base-year, not current year, prices)?
Including the base-year of $68,400, how many layers are there at the end of 2017? (Hint: Any negative changes in inventory should be a correction to a previous layer, not a new layer.)?
In: Accounting