Shannon Polymers uses straight-line depreciation for financial reporting purposes for equipment costing $680,000 and with an expected useful life of 4 years and no residual value. For tax purposes, the deduction is 40%, 30%, 20%, and 10% in those years. Pretax accounting income the first year the equipment was used was $780,000, which includes interest revenue of $19,000 from municipal bonds. Other than the two described, there are no differences between accounting income and taxable income. The enacted tax rate is 40%. Prepare the journal entry to record income taxes.

(If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

The income statement of Redman Inc. for the year ended December 31, 2020, reported the following condensed information:

         Service revenue $ 600,000

         Operating expenses   360,000

         Income from operations 240,000

         Income tax expense                                                             60,000

         Net income   $180,000

Redman's statement of financial position contained the following comparative data at December 31:

     2020                2019

         Accounts receivable $65,000 $40,000

         Accounts payable 40,000 55,000

         Income taxes payable 6,000 3,000

Redman has no depreciable assets. Accounts payable pertains to operating expenses. Prepare the operating activities section of the statement of cash flows using the direct method.

The records for the Clothing Department of Bridgeport’s Discount Store are summarized below for the month of January.

The adjusted trial balance of Pacific Scientific Corporation on December 31, 2021, the end of the company's fiscal year, contained the following income statement items ($ in millions): sales revenue, $2,105; cost of goods sold, $1,250; selling expense, $120; general and administrative expense, $110; interest expense, $35; and gain on sale of investments, $50. Income tax expense has not yet been recorded. The income tax rate is 25%.

Prepare a multiple-step income statement for 2021. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)

Derivative Applications

Please show any necessary work on the following problem:

In February 2017 the price of a daily pass to drive on a Volusia County beach was $10, and at that price 26,467 passes were sold.  In February 2018 the price of a daily pass rose to $20, and the number of passes sold dropped to 17,994.  What is the elasticity of demand for the parking pass?  Is the demand elastic, inelastic, or unit elastic?  Explain the meaning of your answer in the context of this problem.  Is revenue increasing or decreasing?  Next year the County Council may consider raising the price of a daily pass to $30. Based on elasticity of demand, should the Council consider another increase?

From the following information, decide how many segments would be reported to satisfy the appropriate tests of segmented reporting:

REVENUE TEST-

OPERATING PROFIT/LOSS-

SEGMENT ASSETS-

REPORTABLE SEGMENTS-

Does the above selected assets meet eh 75% test?

White Mountain Packaging is considering a project that would last for 2 years. The project would involve an initial investment of 195,000 dollars for new equipment that would be sold for an expected price of 168,000 dollars at the end of the project in 2 years. The equipment would be depreciated to 27,000 dollars over 7 years using straight-line depreciation. In years 1 and 2, relevant annual revenue for the project is expected to be 170,000 dollars per year and relevant annual costs for the project are expected to be 47,000 dollars per year. The tax rate is 50 percent and the cost of capital for the project is 6.34 percent. What is the net present value of the project?