Firm purchases materials for $200 for cash--entries to reflect this: Most busine
ID: 2655617 • Letter: F
Question
Firm purchases materials for $200 for cash--entries to reflect this:
Most businesses, for tax purposes, prefer to depreciate assets using ___ because
a.
accelerated depreciation; get the cash flow benefit sooner
b.
Straight line depreciation; better reflects the declining value of assets
c.
Straight-line depreciation; better tax benefit this way
d.
Accelerated depreciation; slower write off of allowable deductions
3. A company reports the following:
Long-term debt
4,000
Retained earnings
1,000
APIC
150
Current portion of long term debt
300
Accounts payable
1,200
Short-term notes payable
400
Common stock
500
Accruals
600
Treasury stock
250
What is stockholder's equity?
4.
Long-term debt
4,000
Retained earnings
1,000
APIC
150
Current portion of long term debt
300
Accounts payable
1,200
Short-term notes payable
400
Common stock
500
Accruals
600
Treasury stock
250
What are total current liabilities?
5.
Tax rate = 35%
2012
2013
2014
Taxable income
2,000
2,500
-1,500
Taxes paid
-700
-875
0
How much of a tax refund will be received in 2012 and 2013?
6. Net income is 1,024. Interest expense totals 171, while EBITDA is 2,318. If taxes are 563, what is depreciation and amortization (DA) ?
7.Beginning equity for a company is 188, and ending equity is 200. The company sold stock in the amount of 128, and net income is 83. Given this information, how much did the company pay in dividends this year?
8.A business purchases depreciable equipment for 191, and sells it a few years later for 166. At the time of the sale, accumulated depreciation totals 106. If the company's tax rate is 39, what is the total after tax cash flow that will result from selling this asset?
a.
accelerated depreciation; get the cash flow benefit sooner
b.
Straight line depreciation; better reflects the declining value of assets
c.
Straight-line depreciation; better tax benefit this way
d.
Accelerated depreciation; slower write off of allowable deductions
Explanation / Answer
Dear Student We answer one question per post. I have answered 4 of your questions Kindly post remining questions in separate questions 1) Particulars Debit Mat Cr Amt Materials A/C Dr 200.00 To Cash A/C 200.00 2) a. accelerated depreciation; get the cash flow benefit sooner 3) Retailend Earnings 1,000.00 APIC 150.00 Common Stock 500.00 Treasury Stock (250.00) Stockholder's Equity 1,400.00 4) Current portion LTD 300.00 Accounts Payable 1,200.00 Short term notes payable 400.00 Accruals 600.00 Current Liabilities 2,500.00
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