Yes, it would matter. If Wade was primarily concerned with the tax effect, he should give the car to his daughter and let her sell it. Conveniently, the limit on how much one can give without paying federal taxes on that gift (other than to charity), is $13,000. This means wade will pay no tax when he gifts the car to his daughter. If he sells it himself, he will need to pay tax on the gain he realizes on the sale of the car, since he will have made a profit on the sale.
His daughter, when she sells the car, will also have to recognize the gain on the sale of the vehicle. However, she is apparently in a much lower income bracket than Wade, and thus may pay even less tax on her 13,000 gain than Wade would have paid on his $3600 profit.
Answer:
Results are below.
Explanation:
Giving the following information:
Break-even point in sales= $960,000
Actual sales= $1,200,000
<u>To calculate the margin of safety in dollars and as a percentage, we need to use the following formulas:</u>
Margin of safety= (current sales level - break-even point)
Margin of safety= (1,200,000 - 960,000)
Margin of safety= $240,000
Margin of safety ratio= (current sales level - break-even
point)/current sales level
Margin of safety ratio= 240,000 / 1,200,000
Margin of safety ratio= 0.2 = 20%
Answer:
The correct answer is letter "A": "I am never going to use crack again".
Explanation:
People who abused drugs or alcohol and who went into a detoxification program are released only when specialists consider there are good possibilities that person will not fall under the same vice again. Otherwise, the patient will need a longer admission time until that person is aware of the consequences that might bring the continued abuse of drugs.
In that case, the best remark of an ex crack addict upon release from a detoxification program is "<em>I am never going to use crack again</em>".
Answer:
a. -$210,000
b. $455,000
Explanation:
a. Company's net income
Sales. 2,275,000
Less:
Cost of goods sold
1,285,000
Administrative and selling expenses
535,000
Depreciation expense
420,000
EBIT
35,000
Less interest
245,000
Taxable income
-$210,000
Taxes 21%
Nil
Net income
-$210,000
b. The operating cash flow for the year
OCF = EBIT + depreciation - taxes
OCF = 35,000 + 420,000 - 0
OCF = $455,000
c. Net income was negative due to the deductibility of interest expense and depreciation.
The actual operating cash flow was positive due to the fact that depreciation is a non cash expense, and also interest is a financing and not an operating expense.
