Mulford Corporation has provided the following information concerning a capital budgeting project: Investment required in equipment$80,000 Expected life of the project 4 Salvage value of equipment$0 Annual sales$250,000 Annual cash operating expenses$200,000 Working capital requirement$20,000 One-time renovation expense in year 3$20,000 The company's income tax rate is 30% and its after-tax discount rate is 12%. The working capital would be required immediately and would be released for use elsewhere at the end of the project. The company uses straight-line depreciation on all equipment. Assume cash flows occur at the end of the year except for the initial investments. The company takes income taxes into account in its capital budgeting.The income tax expense in year 2 is:
A. $9,000
B. $3,000
C. $6,000
D. $15,000
Answer: A
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Exhibit 11-05Wilson is preparing his tax returns using the MACRS convention. The following information relates to the purchase of an asset on January 1, Year 1.
MACRS Depreciation as a Percentage of the Cost of the AssetYear of Life3 5 7 10 1 33.33% 20.00% 14.29% 10.00% 2 44.45% 32.00% 24.29% 18.00% 3 14.81% 19.20% 17.49% 14.40% 4 7.41% 11.52% 12.49% 11.52% 5 11.52% 8.93% 9.22% 6 5.76% 8.92% 7.37% 7 8.93% 6.55% 8 4.46% 6.55% 9 6.56% 10 6.55% 11 3.28% ? Cost$ 105,000 Estimated Economic Life7 Estimated residual value$ 15,000 Depreciation for Financial Statementsstraight-line MACRS life5 MACRS Method200%-declining-balance ? ? Refer to Exhibit 11-05, what amount of depreciation would have been recorded in Wilson's books for year 3? A. $18,000 B. $12,857 C. $20,160 D. $15,000
One drawback that is particularly relevant to ________ is the user expectation of very quick and timely response to questions or comments.
A. blogs B. Twitter C. e-mail D. Facebook E. Snapchat
Dazzle, Inc. produces beads for jewelry making use. The following information summarizes production operations for June. The journal entry to record June production activities for direct material usage is: Direct materials used$87,000 Direct labor used 160,000 Predetermined overhead rate (based on direct labor) 155%Goods transferred to finished goods 432,000 Cost of goods sold 444,000 Credit sales 810,000
A. Debit Work in Process Inventory $87,000; credit Raw Materials Inventory $87,000. B. Debit Work in Process Inventory $87,000; credit Cost of Goods Sold $87,000. C. Debit Raw Materials Inventory $87,000; credit Finished Goods Inventory $87,000. D. Debit Cost of Goods Sold $87,000; credit Finished Goods Inventory $87,000. E. Debit Raw Materials Inventory $87,000; credit Accounts Payable $87,000.
An agreement is ____________________ if its performance requires one party to commit a tort or a crime
Fill in the blank(s) with correct word