WQP Company generated $1,814,700 ordinary income from the sale of inventory to its customers. It also sold three noninventory assets during the year. Compute WQP's taxable income assuming that: a. The first sale resulted in a $10,400 ordinary gain, the second sale resulted in a $23,900 capital loss, and the third sale resulted in a $44,000 capital gain. b. The first sale resulted in a $79,100 capital loss, the second sale resulted in a $35,200 ordinary loss, and the third sale resulted in a $16,000 capital gain.
What will be an ideal response?
a. WQP's taxable income is $1,845,200 ($1,814,700 income from inventory sale + $10,400 ordinary gain + $44,000 capital gain ? $23,900 capital loss [fully deductible]).
b. WQP's taxable income is $1,779,500 ($1,814,700 income from inventory sale ? $35,200 ordinary loss + $16,000 capital gain ? $16,000 capital loss [limited to capital gain]).
You might also like to view...
During 20x5, Oates Company had sales of $500,000, net income of $50,000, average total assets of $700,000, dividend payments of $35,000, net cash flows from operating activities of $90,000, purchases of plant assets of $75,000, and sales of plant assets of $90,000. Free cash flow equals
A) $55,000. B) $105,000. C) $40,000. D) $70,000.
The purpose of the restrictive debt covenant that limits the distribution of profits to shareholders is to ________
A) assure the lender that additional borrowing is constrained or may be subordinated to the original loan B) limit the amount of fixed-payment obligations C) ensure a cash shortage does not cause an inability to meet current obligations D) avoid default of payments to bondholders
A suitable cost driver for the amount of direct materials used is the number of direct labor hours worked.
Answer the following statement true (T) or false (F)
Management restructuring typically involves changes in the composition of the ________, organizational structure, and reporting relationships.
A. lower management team B. middle management team C. top management team D. board of directors