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Sloan [31]
1 year ago
7

The country of Lessidinia has a tax system identical to that of the United States. Suppose someone in Lessidinia bought a parcel

of land for 20,000 foci (the local currency) in 1960 when the price index equaled 100. In 2002, the person sold the land for 100,000 foci, and the price index equaled 600. The tax rate on nominal gains was 20 percent. Compute the taxes on the nominal gain and the change in the real value of the land in terms of 2002 prices to find the after-tax real rate of capital gain.
Business
1 answer:
Montano1993 [528]1 year ago
8 0

Answer: -30%

Explanation:

The Nominal gain is:

= 100,000 - 20,000

= 80,000 foci

Tax on nominal gain:

= 20% * 80,000

= 16,000 foci

After tax nominal value of land:

= 100,000  - 16,000

= 84,000 foci

The real value given the price index is:

= 84,000 / 600 * 100

= 14,000 foci

After tax real rate of cap. gain:

= (14,000 - 20,000) / 20,000

= -30%

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Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct
alex41 [277]

Answer and Explanation:

The Preparation of cost of goods manufactured is shown below:-

<u>Statement of Cost of Good Manufactured </u>

<u>Particulars                                             Amount</u>

Direct Material    

Beginning Inventory a         $40,000  

Purchases b                          $290,000  

Direct material available     $330,000

(c = a + b)  

Ending direct material

inventory d                             $10,000  

Direct Material used                           $320,000  

(e = c - d)

Direct Labor                                        $398,000  

                           ($683,000 - $285,000 - $320,000)

Factory Overhead                              $285,000  

Total Manufacturing Cost                   $683,000  

Add: Beginning WIP Inventory           $42,000  

                         ($690,000 + $35,000 - $683,000)

Less: Ending WIP Inventory                $35,000  

Cost of goods manufactured             $690,000

b and c The Preparation of schedule of cost of goods sold and income statement for the year is prepared below:-

<u>Schedule of cost of goods sold</u>

<u>Income statement for the year</u>

<u>Particulars                                             Amount</u>

Sales                                                     $915,000

                                           ($270,000 + $645,000)

Cost of goods sold    

Beginning inventory of

finished product                      $50,000  

Cost of goods manufactured $690,000  

Cost of goods available

for sales                                    $740,000  

Less:Ending finished good

inventory                                  $80,000

                       ($740,000 - $660,000)

Cost of goods sold

(Unadjusted)                             $660,000  

Over-applied Overhead           $15,000  

                         ($285,000 - $270,000)

Cost of goods sold (Adjusted)                   $645,000

                                      ($660,000 - $15,000)

Gross profit                                                   $270,000

                                 ($30,000 + $100,000 + $140,000)

Less: Selling & Administrative Expenses    

Selling Expenses                   $140,000  

Administrative expenses       $100,000    $240,000  

Operating income                                      $30,000

5 0
2 years ago
The united states department of agriculture (usda) found that the proportion of young adults ages 20–39 who regularly skip eatin
deff fn [24]

Full Question

The united states department of agriculture (usda) found that the proportion of young adults ages 20–39 who regularly skip eating breakfast is 0.238. suppose that lance, a nutritionist, surveys the dietary habits of a random sample of size n=500 of young adults ages 20–39 in the united states.

Apply the central limit theorem for the binomial distribution to find the probability that the number of individuals, ?, in Lance's sample who regularly skip breakfast is greater than 122. You may find table of critical values helpful.

Express the result as a decimal precise to three places.

Answer:

The probability using the Normal Approximation that out of lance’s sample more than 122 people is 0.356

Explanation:

Given

n = Sample Size = 500

p = Probability = 0.238

Using the normal approximation to binomial distribution,

Let X = Event such that a person skips breakfast

If X ~ Binomial (n,p)

Using normal approximation

X ~ Normal (np,npq)

Where n = 500 and p = 0.238

So, X ~ Binomial (n,p) becomes

X ~ Binomial (500 , 0.238)

Using Normal Approximatiom

X ~ (119, 90.678)

The critical table is then constructed as follows;

Binomial --------- Normal

P(X = a) --------- P(a - 0.5 < X < a + 0.5)

P(X ≥ a) --------- P(X > a - 0.5)

P(X > a) --------- P(X > a + 0.5)

P(X ≤ a) --------- P(X < a + 0.5)

P(X < a) --------- P(X < a - 0.5)

Calculating the probability using the Normal Approximation that out of lance’s sample more than 122 people skips

This can be written as P(X > 122)

Looking at the critical table above.

P(X>a) ----- P(X>a + 0.5)

So,

P(X > 122) ---- P(X > 122 + 0.5)

P(X > 122) ---- P(X > 122.5)

Calculating Z score using

z = (x - u)/√σ²

X = 122.5

From X ~ (119, 90.678)

u =mean = 119

σ = standard deviation = √90.678

So,

Z = (122.5 - 119)/√90.678

z = 0.367550550865750

Z = 0.37 ---- Approximated

P(X > 122.5) = P(Z > 0.37)

P(X > 122.5) = 1 - P(Z<0.37) --- using z table

P(X > 122.5) = 1 - 0.6443

P(X > 122.5) = 0.3557

P(X > 122.5) = 0.356 -- Approximated

6 0
2 years ago
An economist studying the market for wild Alaskan salmon determines the price elasticity of supply to be 0.43. a. In this case,
Marina86 [1]

Answer:

A. Inelastic

B. a less than 10% increase in quantity supplied

Explanation:

A supply is inelastic when a percentage change in quantity supplied is less than percentage change in price.

A supply is inelastic if the price elascitiy is less than 1.

4 0
2 years ago
Read 2 more answers
A company owns an empty office building and is deciding how to use it next year. It would cost $100,000 to staff the office and
Galina-37 [17]

Answer:

It is more profitable to rent the office. Income will increase by $30,000

Explanation:

Giving the following information:

It would cost $100,000 to staff the office and $15,000 for equipment. The revenues would be $160,000.

Rent= $75,000 in revenues.

We need to calculate the most profitable decision:

Option A:

Income= 160,000 - 100,000 - 15,000= 45,000

Option B:

Rent= 75,000

It is more profitable to rent the office.

5 0
1 year ago
For 2019, Bargain Basement Stores reported $11,500 of sales and $5,000 of operating costs (including depreciation). The company
Kamila [148]

Answer:

Economic Value Added (EVA) = $2,620

Explanation:

WACC = 11%

Capital = $20,500

Sales = $11,500

Operating cost = $5,000

Tax rate = 25%

EBIT = Sales - Operating cost

EBIT = $11,500 - $5,000

EBIT = $6,500

Economic Value Added (EVA) = EBIT (1 - T) - (WACC * Capital)

Economic Value Added (EVA) = 6,500*( 1 - 0.25) - (0.11 * $20,500)

Economic Value Added (EVA) = $4,875 - $2,255

Economic Value Added (EVA) = $2,620

5 0
1 year ago
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