Bonita's employer has a nondiscriminatory childcare reimbursement plan (a type of flexible benefits plan). Bonita expects that her childcare expenses will total $2,000 for the current year. If she does not participate in the reimbursement plan, she will be allowed a $400 tax credit for childcare. Bonita's marginal tax rate is 24%. What are the tax effects of Bonita's alternatives?
I.Bonita will save $2,000 by using the reimbursement plan.II.The reimbursement plan is $80 more favorable than the tax credit for Bonita.?
A. Only statement I is correct.
B. Only statement II is correct.
C. Both statements are correct.
D. Neither statement is correct.
Answer: B
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McKay Company sells merchandise with a one-year warranty. In Year 1, sales consisted of 1,200 units. It isestimated that warranty repairs will average $10 per unit sold, and 30% of the repairs will be made in Year 1 and70% in Year 2 . In the Year 1 income statement, McKay should show warranty expense of
a. $3,600 b. $8,400 c. $12,000 d. $0
Argentina provides a good example of how a country can emerge from an economic crisis as a stronger global competitor as per the following statement:
A) Argentina reduced the duties on consumer goods. B) Argentina devalued its currency for exports and capital transactions. C) Argentina added tariffs on imported wines. D) Argentina adopted the U.S. dollar as official currency. E) Argentina added tariffs on wine produced within the country.
An example of a nonfinancial transaction is
a. sale of products b. cash disbursement c. log of customer calls d. purchase of inventory
Personal property is the earth's crust and all things firmly attached to it.
Answer the following statement true (T) or false (F)