Answer:
Mathis Co.
The Tax payable for 2020 is:
= $1,320,000
Explanation:
a) Data and Calculations:
2020 Financial income = $1,200,000
add Litigation expense 3,000,000
add installment sales 2,400,000
Adjusted taxable income $6,600,000
Income tax rate = 20%
Tax payable for 2020 = $1,320,000
b) The litigation expense was deducted from the financial income. This is added back to the income. Installment sales were not included in the revenue for the financial income of 2020. This is also added to the financial income. The net result is the figure for taxable income. This forms the basis for the application of the income tax rate of 20%.
Answer: b. (200 airplanes, 12,500 cars) and (150 airplanes, 15,000 cars)
Explanation:
The opportunity cost of an airplane is 50 cars. This means that if the number of planes produced were reduced by 50, the number of cars should increase by:
= 50 * 50
= 2,500 cars.
In option B, the airplanes were 200 and then reduced by 50 to 150. This led to an increase in cars of:
= 15,000 - 12,500
= 2,500 cars
Option B therefore satisfies the constraints and is correct.
Answer:
Explanation:
For computing the incremental effect on the company's overall profit between reworking and selling the material rather than selling it as is as scrap, we have to do the comparison between these two.
The calculation is shown below:
= Scrap value of material - rework sale value
= $30,100 - $30,800
= - $700
The other items which are shown in the question are irrelevant for comparison. Thus, it is ignored.
Hence, the incremental effect on the company's overall profit of reworking and selling the material rather than selling it as is as scrap is show a loss of $700
Answer:
"Perhaps we should explore which stakeholders would stand to win or lose from such a decision."
Explanation:
An ethical decision is one that is aimed towards generating trust from other parties. It shows responsibility, fairness, and caring towards a person.
In this scenario your manager suggests you postpone processing any existing claims in the 4th quarter until the new fiscal year (some claims are as high as $150,000).
The best ethical response will be - Perhaps we should explore which stakeholders would stand to win or lose from such a decision.
This will result in self reflection about who will be affected by the decision. The consideration will not be just the immediate 4th quarter impact of postponing the warranty claims.
This is the most ethical decision among the options.
Answer:
Ted is giving up an interest of 37.5 by pre-committing his money to a Christmas savings account
Explanation:
Step 1: Determine interest amount
The formula for calculating interest is as follows;
I=PRT
where;
I=interest
P=principal
R=annual interest rate
T=number of years
In our case;
P=750
R=10%=10/100=0.1
T=From June 1 to December 1=6 months=0.5 years
replacing;
I=(750×0.1×0.5)=$37.5
Step 2: Determine total amount Ted will have for the two scenarios
case 1
Christmas savings program=750
Ordinary savings account=(750+37.5)=787.5
Ted is giving up an interest of 37.5 by pre-committing his money to a Christmas savings account