Assignment
1. Bear Tracks, Inc., has current assets of $2,340, net fixed assets of $11,000, current liabilities of $1,435, and long-term debt of $4,150.
What is the value of the shareholders' equity account for this firm?
How much is the company's net working capital?
Pharrell, Inc., has sales of $597,000, costs of $261,000, depreciation expense of $65,000, interest expense of $32,000, and a tax rate of 35 percent.
What is the net income for this firm?
Pharrell, Inc., has sales of $599,000, costs of $259,000, depreciation expense of $64,000, interest expense of $31,000, and a tax rate of 30 percent. The firm paid out $43,000 in cash dividends.
What is the addition to retained earnings?
Pharrell, Inc., has sales of $585,000, costs of $273,000, depreciation expense of $71,000, interest expense of $38,000, and a tax rate of 35 percent. The firm paid out $36,000 in cash dividends and has 40,000 shares of common stock outstanding.
What is the earnings per share figure?
What is the dividends per share figure?
The SGS Co. had $182,000 in taxable income. Use the rates from Table 1.
Calculate the company's income taxes.
2. The SGS Co. had $243,000 in taxable income. Use the rates from Table 1.
What is the average tax rate?
What is the marginal tax rate?
Marginal tax rate
3. Hailey, Inc., has sales of $19,570, costs of $9,460, depreciation expense of $2,130, and interest expense of $1,620. Assume the tax rate is 35 percent.
What is the operating cash flow, or OCF?
4. Rotweiler Obedience School's December 31, 2015, balance sheet showed net fixed assets of $1,755,000, and the December 31, 2016, balance sheet showed net fixed assets of $2,100,000. The company's 2016 income statement showed a depreciation expense of $327,000.
What was the company's net capital spending for 2016?
The December 31, 2015, balance sheet of Maria's Tennis Shop, Inc., showed current assets of $1,145 and current liabilities of $935. The December 31, 2016, balance sheet showed current assets of $1,360 and current liabilities of $1,035.
What was the company's 2016 change in net working capital, or NWC?
(Refer to Table 1) Corporation Growth has $87,000 in taxable income, and Corporation Income has $8,700,000 in taxable income.
a. What is the tax bill for each firm?
b. Suppose both firms have identified a new project that will increase taxable income by $5,000. How much in additional taxes will each firm pay?
TABLE 1: Corporate tax rates
|
Taxable Income
|
Tax Rata
|
|
$ 0-
|
50,000
|
15%
|
|
50,001-
|
75,000
|
25
|
|
75,001-
|
100,000
|
34
|
|
100,001-
|
335,000
|
39
|
|
335,001-
|
10,000,000
|
34
|
|
10,000,001-
|
15,000,000
|
35
|
|
15,000,001-
|
18,333,333
|
38
|
|
18,333,334+
|
|
35
|