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Prepare a journal entry to write off the difference between allocated and actual overhead directly to Cost of Goods Sold. Be sure your journal entry closes the related overhead accounts.
which will allow a cost recovery deduction of $64,000 for 2011. Assume a present and future enacted income tax rate of 30%. What amount should be added to Gore's deferred income tax liability for th
Denber Co. acquired 60% of the common stock of Kailey Corp. on September 1, 2010. For 2010 Kailey reported revenues of $810,000 and expenses of $630,000, all reflected evenly throughout the year. Th
Scobie Corporation's fixed monthly expenses are $16,000 and its contribution margin ratio is 57%. Assuming that the fixed monthly expenses do not change, what is the best estimate of the company's n
Shareholders in closely held C-corporations often pay themselves large salaries in order to avoid double taxation on corporate income. a. Briefly explain the double taxation problem and how paying l
cumulative earnings for year prior to current week, $96,780; social security tax rate, 6.0% on maximum of $103,004; and Medicare tax rate, 1.5% on all earnings. What is the net amount to be paid the
Leon sold a piece of business equipment that had an adjusted basis to him of $40,000 for $65,000 cash plus artwork that had a fair market value of $15,000. The buyer assumed Leon's $20,000 loan on
Assume an organization has total current assets of $200,000, total current liabilities of $75,000, inventories of $50,000, prepaid expenses of $25,000, net sales of $770,000, and beginning accounts
How much gain does Kyle recognize on his exchange? What is the basis to Kyle of his 1,000 shares?
On December 31, 2007, Drew Company issued $170,000, five-year bonds for $155,000. The stated rate of interest was 6 percent and interest is paid annually on December 31.what would be the necessary j
Sara owns a sole proprietorship and Phil is the sole shareholder of a C (regular) corporation. Each business sustained a $9,000 operating loss and a $2,000 capital loss for the year. Evaluate how t
Sesame company purchased a computer system for $74,000 on January 1,2009. It was depreciated based on a 7-year life and an $18,000 salvage value. on january 1, 2011, Sesame revised these estimates t
XYZ Company had a net loss of $90,000 from operations in 2007. Tina owns XYZ and works 20 hours a week in the business. She has a large amount of income from other sources and is in the 33% marginal
Wilson Co. purchased land as a factory site for $600,000. Wilson paid $60,000 to tear down two buildings on the land. Salvage was sold for $5,400. Legal fees of $3,480 were paid for title investigat
A company projects annual cash inflows of $85,000 each year for the next five years if it invests $300,000 in new equipment. The equipment has a five-year life and an estimated salvage value of $75,
Compute the approximate internal rate of return of each project. Which one should be adopted based on the internal rate of return approach?
Determine the payback period and unadjusted rate of return (use average investment) for each alternative.
The Large trucks are expected to cost $600,000 and to have a four-year useful life and a $60,000 salvage value. In addition to the purchase price of the trucks, up front training cost are expected t
Cleaners, Inc. is considering purchasing equipment costing $30,000 with a six-year useful life. The equipment will provide cost savings of $7,300 and will be depreciated straight-line over its usefu
Determine the cost of the inventory balance at May 31, using (1) the first in, first-out method and (2) the last in, first-out method. Identify the quantity, unit price, and total cost of each lot
In October $300 is received on the $500 owned by Cox Co., and the remainder is written off as uncollectible. (b) Based on the data in (a) (1) above, what is the net realizable value of the accounts
A company budgeted unit sales of 102,000 units for January, 2008 and 120,000 units for February, 2008. The company has a policy of having an inventory of units on hand at the end of each month equal
Determine the amount to be added to Allowance for Doubtful accounts in each of the following cases. (a) Balance of $500 in the allowance account just prior to adjustment. Analysis of accounts receiv
he board of directors of Green declared cash dividends of $50,000 in 2011 after paying $20,000 cash dividends in each of 2010 and 2009. What is the amount of dividends common shareholders will recei
If the company uses the income statement approach of estimating uncollectible accounts and has estimated that uncollectible accounts will be 1.5% of net sales, what is the amount of uncollectible ac