Answer:
Explanation:
Amount realized on sale:
Cash $75,000
Purchaser’s note 675,000
$750,000
Adjusted basis (535,000)
Gain realized on sale $215,000
b. $215,000 gain realized ÷ $750,000 contract price = 28.67% gross profit percentage.
Cash received in year of sale:
Cash at closing $75,000
August principal payment 33,750
$108,750
Gain recognized (108750*28.67%) $31,179
A. Book gain $215,000
Tax gain (31,179)
Book/tax difference $183,821
B. $183,821 × 35% = $64,338 deferred tax liability
The excess of book gain over tax gain is a favorable difference.
Answer:
As the Company has received a Cheque of $10,000,000 for payment in full. The Company though have not started the production it can consider such amount and cancel the contract and being a misc Income in its profit and loss account.
Though the product is being sold to an university and such organisation work on No profit no loss situation hence it can consider manufacturing 10 units and selling such units to the university at least the university also does not incur a loss of such a huge amount.
Answer: B
The marginal propensity to save will remain unchanged in each of the countries.
Explanation:
Marginal propensity to consume (MPC) is the percentage of increase or decrease in income that goes to consumption
Marginal propensity to save (MPS) is the percentage of increase or decrease in income that goes into savings. It can also be expressed as:
1 - MPC
Average propensity to save measures the level of saving at a given level of income.
The marginal propensity to save measures changes in savings relative to changes in income but the income remains unchanged here, the MPS also remains unchanged.
Given that S<span>am's distribution of meal costs has a mean of $9 and a
standard deviation of $3, this means that the range of Sam's meal cost
that are within one standard deviation is given by ($9 - 3, $9 + 3) =
($6, $12).
Given that Sam </span><span>always tips the server $2
plus 10% of the cost of the meal, this means that when the cost of the
meal is $9, Sam tips $2 + (0.1 x 9) = $2 + $0.9 = $2.90
Therefore, the mean of the distribution of Sam's tips is $2.90
Similarly, the </span><span>range
of Sam's tips that are within one standard deviation is given by ($2 +
0.1(6), $2 + 0.1(12)) = ($2 + 0.6, $2 + 1.2) = ($2.6, 3.2) = ($2.9 -
$0.3, $2.9 + $0.3)
Therefore, </span><span>the standard deviation of the distribution of Sam's tips is $0.3</span>
The free cash flow can be calculated as below:
Revenue 12000000
Less: Expense (8000000)
Less: Depreciation (1500000)
Earnings Before Tax 2500000
Less Tax (750000)
Earnings after tax 1750000
Add Depreciation 1500000
Total Cash Earnings 3250000
Less: Change in Working Capital (500000)
Less : Purchase of Asset (700000)
Free Cash Flow 2050000
Thus Free Cash Flow can be calculated as above.
