Answer:
b. first-in, first-out.
Explanation:
Generally, there are three methods for estimating the inventory shown below:
1. First-in-first, the company is selling the old products in this way than the new ones, which means first selling the old products and then selling the new ones
2. Weighted average method: Weighted cost is measured by considering the total revenue and total purchase
3. Last-in-first-out: Contrary to the first-in-first-out process, the first sale of new goods, then selling of old goods.
4. Base stock: The process by which the orders of the consumer are fulfilled by holding the less inventory
In the FIFO method, the highest ended inventory results in the lower cost of goods sold at the highest net profits.
In a period of rising prices, the first-in, first-out (FIFO) inventory method gives the highest reported net income because it records the oldest, less costly inventory as cost of goods sold, leaving the more expensive recent inventory on hand.
The inventory method which tends to give the highest reported net income in a period of rising prices is first-in, first-out (FIFO). The FIFO method assumes that the earliest goods purchased are the first to be sold. During a period of rising prices, the oldest inventory, which cost less, is recorded as cost of goods sold, leaving the newer, more costly inventory on hand. As a result, the cost of goods sold (an expense) would be lower, and, therefore, net income would be higher. Contrarily, the Last-in, first-out (LIFO) method would tend to show a lower net income in a period of rising prices because the more expensive recent inventory would be recorded as cost of goods sold first.
Similarly, the base stock and weighted-average methods may not reflect the highest net income in a period of rising prices as they take different approaches in calculating inventory and cost of goods sold.
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Answer:
The required rate of return is 7.20%
Explanation:
The price of a share that pays a particular dividend amount in perpetuity is given by the below formula:
price of share=dividend/required rate of return
price of share is $91.00 per share
dividend payable in perpetuity is $6.55
required rate of return is unknown
$91=$6.55/required rate of return
required rate of return =$6.55/$91
=7.20%
to confirm the required of return,I divided the by the required rate of return as shown below:
6.55/0.0.72=$90.97 .approximately $91
That is a way to validate the computed required rate of return
Answer:
$151,673
Explanation:
Average cost method calculate the cost of the inventory on the average price basis. Cost of goods sold is the cost of the goods sold in the given period.
Description Units Rate Value
Beginning Inventory 7,400 $11.00 $81,400
Purchases 3,100 $12.00 $37,200
Purchases 12,200 $12.50 $152,500
Total Inventory 22,700 $11.94273128 $271,100
Sale 12,700 $11.94273128 $151,673
Cost of Goods Sold = $271,100 x 12,700 / 22,700 = $151,673
Answer:
A) Your own Contribution in 401(K) is $12,000.
B) Total Value of fund after one year = $21,000 × (1 + 12%)
= $23,520.
Explanation:
A) Total Annual Income = $120,000
Contribution in 401(K) = 10% of income
= $120,000 × 10%
= $12,000
your own Contribution in 401(K) is $12,000.
Employee contribution after tax = $12,000 × (1 31%)
= $8,280
Contribution of employer = $12,000 × 75%
= $9,000
Total Contribution = $12,000 + $9,000
= $21,000
Total Contribution in one year is $12,000.
Yield on fund = 12%
Total Value of fund after one year = $21,000 × (1 + 12%)
= $23,520.
after tax return = ($23,520 -$8,280) / $8,280
= 184%
After tax return is 184%.
You don't have to pay that income tax until you withdraw the money
The annual investment in the 401(k) plan is $21,525, comprising $12,300 from your contribution and $9,225 from your company's match. The one-year return, counting an expected yield of 12%, would be $24,108.
The annual investment in the 401(k) plan is calculated by finding 10% of the annual income of $123,000 which amounts to $12,300. The company then matches 75% of this investment. So, the company contribution is 0.75 * $12,300 = $9,225. Therefore, the total annual investment into the 401(k) plan is $12,300 (your contribution) + $9,225 (company’s contribution) = $21,525.
Your one-year return would be the total investment in the fund, including the expected 12% yield next year. So that's $21,525 * 1.12 = $24,108.
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Answer:
According to the OECD the total expenditure of the US government, including state and local is about a 38% of the GDP.
Explanation:
The federal government expends almost the 55% of the total and the remaining 45% the state and local government.
Answer:
b. companies can use accounting methods that minimize net income for tax purposes and other methods that maximize net income for reporting to shareholders.
As they use a basis for accounting and prepare the financial statement temporary difference arise which, are settled overtime as in the end both, tax basis and accounting basis much get the same income
The most common example is depreciation if a company uses S179 and depreciate the entire of the asset purchase next year, while the accounting will have a depreciation expense associate with the equipment for tax purposes this assets basis is zero as it was completely depreciate thus, it will have a higher income making more tax payable than accounting income tax expense.
Explanation:
a. corporations often make errors in their tax estimations.
While this can occur is not the reason for deferred income taxes
c. the IRS owes a company a refund from last year.
No, the refund will not generate deferrd income tax It will be a receivable for the company.
d. large corporations generally have operations in foreign countries whose tax law is quite different from U.S. tax
While corporations do operate in foreing countries these doesn't necessary generate deferred taxes. Difference arise when the company uses a different method in his accounting than the State to determinate the tax basis.
Answer:
The total equivalent units of production for direct materials is 74000 Units.
Explanation:
materials required for production are added at the beginning of the process. So whatever the Total amount of materials required for 74000 Tons as been added at beginning of the Production (in July). For the Purpose of materials we need to consider 100% Completed.
total Equalent Units = Total Units Started
= 74000 Units
Therefore, The total equivalent units of production for direct materials is 74000 Units.