A company with a 15% tax rate buys preferred stock in another company. The preferred stock has a before-tax yield of 7.50%. Assume a 70% dividend exclusion for tax on dividends. What is the preferred stock's after-tax return? (Round your final answer to two decimal places.)
A. 7.74%
B. 6.95%
C. 7.16%
D. 5.94%
E. 7.09%
Answer: C
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Summer, Inc has been in business for 20 years. During that time the company has consistently used the LIFO inventory costing method. Because of inflation, prices for merchandise have increased consistently over the 20 years. The company has maintained the same inventory quantities over the 20-year period. Which one of the following statements is true?
a. Summer, Inc. will have paid more income taxes over the past 20 years than it would have if it had used the FIFO method. b. Summer, Inc.'s total net income for the past 20 years is greater than it would have reported using another inventory method. c. Summer will have to continue using the LIFO method indefinitely because of generally accepted accounting principles and federal income tax rules. d. The ending inventory figure reported on the balance sheet may be significantly lower than its current value.
Any initial direct costs incurred by the lessor for a sales-type lease should be
A) expensed in the same period that the lease receivable is recognized. B) recorded as a prepaid asset and allocated to expense over the lease term. C) deferred and recognized as a reduction in the interest rate implicit in the lease. D) directly charged (debited) to Retained Earnings.
Some would argue that the role of accounting is simply as an information provider. Others suggest that accountants serve the role of business analyst. Which role produces more value for a company like Starbucks? In the area of accounting information systems, what specifically can the accountant do to serve as a business analyst to help address business opportunities?
What will be an ideal response?
The making of a decision by general agreement and in the absence of any voiced objection is called ________
A. social referencing B. expropriation C. waiver D. consensus