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Accounting

A Discussion of Value Added Taxes

1. A furniture manufacturer sells $500,000 worth of tables, chairs, and other items in a given year. The manufacturer earns a profit of $100,000 that year. His purchase invoices indicate that he bought $200,000 worth of lumber, varnish, nails, and other materials during the year. His labor costs were $150,000, and he purchased $

Income Tax question

Problem 13-52 Underpayment of Estimated Taxes (LO. 6) Julie, being self-employed, is required to make estimated payments of her tax liability for the year. Her tax liability for 2011 was $25,000, and her AGI was less than $150,000. For 2012, Julie ultimately determines that her income tax liability is $18,000. During the year,

Parker and Spitzer Manufacturing Special Order Minimum Price

Parker and Spitzer Manufacturing is approached by a European customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. The following per unit data apply for sales to regular customers:   Direct materials $66 Direct labor 30 Variable manufacturing support 48 Fixed ma

Progressive Taxes

Why are progressive taxes particularly important to the corporate form of business?

Restaurant Analysis

You are one of the star managers for a large chain restaurant company. Senior management has asked you to take over an underperforming restaurant. Your first order of business is to evaluate and provide solutions to the following problems in the restaurant. 1. Food cost: Has inflated to over 50%. 2. Labor: Not enough skille

Jas Carillo accounting scenario

Jas Carillo was discussing summer employment with Maria Perez, president of Valparaiso Construction Service: Maria: I'm glad that you're thinking about joining us for the summer. We could certainly use the help. Jas: Sounds good. I enjoy outdoor work, and I could use the money to help with next year's school expenses.

999 Tax Plan

What is the 999 tax plan? What impact would this tax plan have on the corporation?

Social Trends In Corporate Taxation

Current social trends in corporate taxation have a tremendous impact on how corporations run their business activities. For instance, tax liabilities will affect where a corporation runs its activities—in the United States or in a foreign country—and whether or not it elects to bring foreign earned cash back to the States. I

Accounting: P&L, Cost, Break Even

Posted problems: 5.1 Consider the CVP graphs below for two providers operating in a fee-for-service environment: see attached file a. Assuming the graphs are drawn to the same scale, which provider has the greater fixed costs? The greater variable cost rate? The greater per unit revenue? b.Which provider has the gre

Lowes Home Depot: Compare accounting policies

For each Lowe's Companies, Inc. and the Home Depot, Inc., identify the accounting methods used to interpret business data such as revenue recognition, expenses, fixed assets, debt securities, intangible assets, and bond issues. Compare the accounting methods used by the two companies to interpret business data such as revenue

Should the external costs of driving cars be paid through a tax on gasoline

Who should pay the external costs of driving? As the textbook points out, driving a car has external costs. The health cost of pollution alone has been estimated between $0.40 and $6.00 per gallon of gasoline consumed. (It is very difficult to measure the health costs. We are uncertain which health problems pollution causes and

Clock builder and Dress for Success

1. The Clock Builder makes grandfather clock kits that it sells to hobbyists who then assemble and finish the clocks. The company has the capacity to make 5,000 of the clocks, and its current volume is 3,000 kits. The costs to make a clock kit are: $300 for unit-level materials, $200 for unit-level labor, and $250 for an allocat

Cost Accounting: Activity Based Costing

"This is illogical," said Mike Rafferty, president of XYZ Company. "Unit sales this year were the same as last year, but our bottom line profits have more than doubled. Who made the accounting mistake�"the people or the computer?" The income statements to which Mr. Rafferty was referring are shown below (based on the absorp

Performance Reporting and Flexible Budgeting

Performance reporting and flexible budgeting. For the stamping department of a manufacturing firm, the standard cost for direct labor is $12 per hour, and the production standard calls for 1,000 stampings per hour. During June, 168 hours were required for actual production of 148,000 stampings. Actual direct labor cost for the

Rocky Mountain Manufacturing: Flexible Budgeting

Exercise 15.2 Flexible budgeting Rocky Mountain Manufacturing produces a single product. The original budget for November was based on expected production of 35,000 units; actual production for November was 33,250 units. The original budget and actual costs incurred for the manufacturing department follow: Orig

Standard Costs and Variances: Dresser Company

Dresser Company uses a standard cost system and sets predetermined overhead rates on the basis of direct labor-hours. The following data are taken from the company's budget for the current year: Denominator activity (direct labor-hours).................................................9,000 Variable manufacturing overhead cos

Managing Assets

One of your long-standing clients is a domestic manufacturer, who up until now has not only manufactured their products solely in the US but also only sold their products in the US. About a month ago, their CEO visited and said they were planning to "go global"; this would include both sourcing of manufactured parts from oversea

Scenario: Control procedures that prevent/detect the theft of cash

The following is an excerpt from a conversation between two sales clerks, Tracy Rawlin and Jeff Weimer. Both Tracy and Jeff are employed by Magnum Electronics, a locally owned and operated electronics retail store. Tracy: Did you hear the news? Jeff: What news? Tracy: Bridget and Ken were both arrested this morning. Je

Accounting for Income Taxes: AT&T's 2000 Annual Report

In AT&Ts 2000 annual report, the company reported long-term deferred tax assets of $4,523,000,000 and current deferred tax assets of $1,791,000,000. Disclosure Note 15 reported, in part: At December 31, 2000, we had net operating loss carry-forwards (tax-effected), excluding Excite@Home, for federal and state income ta

income tax: small business stock

Problem 7-35 Bad Debt and § 1244 Stock and Capital Loss Limit (LO. 1, 2) Mabel and Jack file a joint return. For the current year, they had the following items: Salaries $120,000 Loss on sale of § 1244 stock acquired two years ago 105,000 Gain on sale of § 1244 stock acquired six months ago 20,000 Nonbusiness bad

Book Exercise for Swannworth Inc.

Swannworth Inc., expects its overhead costs for the coming fiscal period to be $78,300. Total direct labor charges should be 3,000 hours at $10 per hour plus 900 hours at $l5 per hour. a. Compute the predetermined overhead rate, using direct labor dollars as the allocation base. b. Ignoring the information given above, consi

Common-Size Percentage for Net Income

Foreign Travel Services has net income of $48,400, total assets of $219,000, total equity of $154,800, and total sales of $311,700. What is the common-size percentage for the net income? A. 9.00 percent B. 13.90 percent C. 15.53 percent D. 22.10 percent E. 31.27 percent Delmont Movers has a profit margin of 6.2 percent

Capital Gains Taxes

James Welling, a 37 year old engineer has an appointment to meet you in about an hour. As you are reviewing his accounts, you notice that he is a fairly active trader. He seems to do pretty well with returns that outpace the averages, but you can't help wonder how much he ends up paying each year in capital gains taxes. As his

Agency Analysis

Identify a public agency - either at the local, state, or federal levels - that has undergone significant change in the last 25 years. You may choose an agency that you have had personal experience with, or you may choose a public agency that you are familiar with from the news or from academic study. Assess the scope of servi