Costs and Price

32. Which of the following amounts must be included in the gross income of the recipient?

a. What amount of ordinary income and separately stated items are allocated to them for years 1 and 2 based on the information above?

Which of the following amounts must be included in the gross income of the recipient?

2. Refer to the above table to answer this question. Suppose that Mia has a budget of $7 and the price of a litre of soya milk is $1, what is the maximum quantity that Mia might purchase?

In our second assumption, instead of using the cost of goods per cases in 1986, we try to use the percentage it counts in the total expenses which is 50.4% and to find the sales needed to break-even. The detail of the calculation is shown in the answer for questions d. The result is that 95,635, a little bit higher than the estimated sales of 90,000.

What correcting entry should you prepare? 54 A. Office Expense Accounts Payable 54 54 B. Accounts Payable Office Expense 54 28 C. Accounts Payable Office Expense 28 D. No entry is needed

10,861.31 Salaries and Wages 12 7,736 7,736 7,736 7,736 7,736 7,736 7,736 7,736 7,736 7,736 7,736 7,736 Employee Related Expenses 15% 1,160.35 1,160.35 1,160.35 1,160.35 1,160.35 1,160.35 1,160.35 1,160.35 1,160.35 1,160.35 1,160.35 1,160.35 Direct Operatings Expesnes 3.60% 903 966 1,029 1,092 1,218 1,280 1,406 1,531 1,531 1,280 1,154 1,029 Utilities & Telephone 3.40% 853 913 972 1,031 1,151 1,209 1,327 1,446 1,446 1,209 1,090 972 Property Insurance 1.50% 376 403 429 455 508 533 586 638 638 533 481 429 Admin Expenses 1.70% 427 456 486 516 575 604 664 723 723 604 545 486 Repairs & Maint 1.00% 251 268 286 303 338 356 390 425 425 356 321 286 Advertising & Promotion 2.00% 502 537 572 607 677 711 781 851 851 711 641 572 Property & Related Taxes 2.20% 1,924 1,771 2,194 2,730 Inventory 532.20 44 44 44 44 44 44 44 44 44 44 44 44 Loan Pymt $1,836.20 1,836 1,836 1,836 1,836 1,836 1,836 1,836 1,836 1,836 1,836 1,836 1,836 Total Outflows: 25,550 24,518 25,411 28,075 28,106 28,981 32,961 32,552 32,552 31,712 27,196 25,411 Beginning Cash Balance 47,828 47,374 49,695 52,866 55,117 60,858 67,432

F. I believe that Mrs. K desires that the $10,000 is not taxable income. This

c. What is your determination regarding reducing the taxable amount of income for both (a) and (b) above?

13. C Because fair value of the subsidiary 's assets exceeds the tax basis by $100,000 a deferred tax liability of $30,000 (30%) must be recorded. Goodwill is then computed as follows: Consideration transferred ...................................... Fair value ............................................................... Deferred tax liability ................................................. Goodwill .................................................................... $420,000 $400,000 (30,000) 370,000 $50,000

b) Given the prices in part a, each brand would change the prices to the ones listed above to maximize their profits. The results of the second set of prices, after maximized again based on the set of prices in part a, are be shown in the following table.

b. Assuming that Shaw had never recorded any Contract Liability Adjustments and Accrued Contract Loss Reserves

The accompanying table shows the demand schedule for Vitamin D. Suppose the marginal cost of producing Vitamin D is zero

(a) Total direct costs for the business divided by the total number of units produced.

b. The company is spending $500 million to open a new plant and expand operations in China. No profits will be produced by the Chinese operations for 4 years, so earnings will be depressed during the period versus what they should have been had the decision been made not to expand in China.