12. Suri has decided to buy a car. The car has a MSRP of $24 500. She wishes to get several upgrades that will cost $2654. She has negotiated a $2800 discount from the MSRP. Freight costs $800. She must pay a fuel-efficiency tax of $500 and an air conditioner tax of $90. The dealer is charging her a non-taxable administration fee of $45. Licence fees (non-taxable) cost $80, and gas (also non-taxable) costs $50. Calculate the total amount, including taxes, that Suri must pay the dealership. (Note: Tax is 13%.) (
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- Eagle Life Insurance Company pays its employees 0.30 per mile for driving their personal automobiles to and from work. The company reimburses each employee who rides the bus 100 a month for the cost of a pass. Tom collected 100 for his automobile mileage, and Mason received 100 as reimbursement for the cost of a bus pass. a. What are the effects of the above on Toms and Masons gross income? b. Assume that Tom and Mason are in the 24% marginal tax bracket and the actual before-tax cost for Tom to drive to and from work is 0.30 per mile. What are Toms and Masons after-tax costs of commuting to and from work?Deja owns a photo printing business and wants to purchase a new state-of-the-art photo printer that she found online for $9,275, plus sales tax of 5.5%. The supply company is offering cash terms of 2/15, n/30, with a 1.5% service charge on late payments, or 90 days same as cash financing if Deja is approved for a company line of credit. If she is unable to pay within 90 days under the second option, she would have to pay 22.9% annual simple interest for the first 90 days, plus 2% simple interest per month on the unpaid balance after 90 days. Deja has an excellent credit rating but is unsure of what to do. a) If Deja took the cash option and was able to pay off the printer within the 15-day discount period, how much would she save? How much would she owe? b) If Deja takes the 90 days same as cash option and purchases the printer on December 30 to get a current-year tax deduction, using exact time, what is her deadline for paying no interest in a non-leap year? In a leap year?Deja owns a photo printing business and wants to purchase a new state-of-the-art photo printer that she found online for $9,275, plus sales tax of 5.5%. The supply company is offering cash terms of 2/15, n/30, with a 1.5% service charge on late payments, or 90 days same as cash financing if Deja is approved for a company line of credit. If she is unable to pay within 90 days under the second option, she would have to pay 22.9% annual simple interest for the first 90 days, plus 2% simple interest per month on the unpaid balance after 90 days. Deja has an excellent credit rating but is unsure of what to do. d) Deja finds financing through a local bank. Find the bank discount and proceeds using ordinary interest for a 90-day promissory note for $9,500 at 8% annual simple interest. Is this enough money for Deja to cover the purchase price of the printer? Is this a better option for Deja to pursue, why or why not?
- Deja owns a photo printing business and wants to purchase a new state-of-the-art photo printer that she found online for $9,275, plus sales tax of 5.5%. The supply company is offering cash terms of 2/15, n/30, with a 1.5% service charge on late payments, or 90 days same as cash financing if Deja is approved for a company line of credit. If she is unable to pay within 90 days under the second option, she would have to pay 22.9% annual simple interest for the first 90 days, plus 2% simple interest per month on the unpaid balance after 90 days. Deja has an excellent credit rating but is unsure of what to do. c) If Deja takes the 90 days same as cash and pays within 90 days, what is her payoff amount? If she can't pay until April 30, how much additional money would she owe? (Assume ordinary interest and exact time and a non-leap year)Like 99% of other sane taxpayers, you, a self-employed CPA, elect the standard mileage rate ($0.58 per mile for 2019, $0.575 per mile for 2020) for deducting the cost of your business-related excursions from your home office, not that crazy “actual cost method” that would have you keeping every single receipt for every single car-related expense. But, in addition to gas, you incur the following costs on your trips to see clients (etc.) – tolls, parking, interest on car loan, repairs, insurance, and speeding tickets. Which, if any, of these expenses can you deduct in addition to the standard mileage rate, and why?X, operates a restaurant in San Mateo. The restaurant provides delicious foods and drinks to various customers at a very low price. In 2018, X has a total sales of 3,500,000 (500,000 are still on credit) ; while the cost of sales and expenses is 1,000,000. Can X avail the 8% optional tax rate? a. Yes b. No, because his sales exceeded 3M c. No, because his sales, excluding on credit is 3M d. No, because he sells VAT exempt goods e. None of the above
- Seiko's current salary is $98,500. Her marginal tax rate is 32% and she fancies European sports cars. She purchases a new auto every year. Seiko is currently a manager for Idaho Supply Company. Her friend, knowing her interest in sports cars, tells her about a manager position at the local BMW and Porche dealer. The new position pays only $87,100 per year, but it allows employees to purchase one new car per year at a discount of $17,700. This discount qualifies as a non-taxable fringe benefit. In an effort to keep Seiko as an employee, Idaho Supply Company offers her a $12,400 raise. Answer the following questions about this analysis. (a) What is the annual after-tax cost to the Idaho Supply Company with the $12,400 increase? (Ignore payroll taxes) (b-1) Financially which offer is better on an after-tax basis? (b-2) By how much is the offer better for Seiko on an after tax basis (Assume that Seiko is going to purchase the car whether she switches jobs or not)Seiko's current salary is $85,500. Her marginal tax rate is 32 percent, and she fancies European sports cars. She purchases a new auto each year. Seiko is currently a manager for Idaho Office Supply. Her friend, knowing of her interest in sports cars, tells her about a manager position at the local BMW and Porsche dealer. The new position pays $74,400 per year, but it allows employees to purchase one new car per year at a discount of $18,400. This discount qualifies as a nontaxable fringe benefit. In an effort to keep Seiko as an employee, Idaho Office Supply offers her a $14,200 raise. Answer the following questions about this analysis. Required: What is the annual after-tax cost to Idaho Office Supply if it provides Seiko with the $14,200 increase in salary? Note: Ignore payroll taxes. b-1. Financially, which offer is better for Seiko on an after-tax basis? b-2. By how much is the offer better for Seiko on an after tax basis? (Assume that Seiko is going to purchase the new car…Seiko's current salary is $87,500. Her marginal tax rate is 32 percent, and she fancies European sports cars. She purchases a new auto each year. Seiko is currently a manager for Idaho Office Supply. Her friend, knowing of her interest in sports cars, tells her about a manager position at the local BMW and Porsche dealer. The new position pays $73,900 per year, but it allows employees to purchase one new car per year at a discount of $23,400. This discount qualifies as a nontaxable fringe benefit. In an effort to keep Seiko as an employee, Idaho Office Supply offers her a $17,800 raise. Answer the following questions about this analysis. What is the annual after-tax cost to Idaho Office Supply if it provides Seiko with the $17,800 increase in salary? Note: Ignore payroll taxes. b-1. Financially, which offer is better for Seiko on an after-tax basis? b-2. By how much is the offer better for Seiko on an after tax basis? (Assume that Seiko is going to purchase the new car whether she…
- Seiko’s current salary is $124,500. Her marginal tax rate is 32 percent and she fancies European sports cars. She purchases a new auto each year. Seiko is currently a manager for Idaho Office Supply. Her friend, knowing of her interest in sports cars, tells her about a manager position at the local BMW and Porsche dealer. The new position pays only $108,000 per year, but it allows employees to purchase one new car per year at a discount of $20,700. This discount qualifies as a nontaxable fringe benefit. In an effort to keep Seiko as an employee, Idaho Office Supply offers her a $12,500 raise. Answer the following questions about this analysis. c. What before-tax salary would Seiko need to receive from Idaho Office Supply to make her financially indifferent (after taxes) between receiving additional salary from Idaho Office Supply and accepting a position at the auto dealership?Seiko’s current salary is $94,500. Her marginal tax rate is 32 percent, and she fancies European sports cars. She purchases a new auto each year. Seiko is currently a manager for Idaho Office Supply, Inc. Her friend, knowing of her interest in sports cars, tells her about a manager position at the local BMW and Porsche dealer. The new position pays only $84,200 per year, but it allows employees to purchase one new car per year at a discount of $21,400. This discount qualifies as a nontaxable fringe benefit. In an effort to keep Seiko as an employee, Idaho Office Supply, Inc. offers her a $18,200 raise. Answer the following questions about this analysis. What is the annual after-tax cost to Idaho Office Supply, Inc. if it provides Seiko with the $18,200 increase in salary? (Ignore payroll taxes.)You are in a car accident and your car is totaled. You find a new-to-you vehicle for $18,395 that you would like to buy. A) If the sales tax is 6.5% of the purchase price, what is the amount of the sales tax? B) With the sales tax, how much is the vehicle cost altogether? C) If the car license fee is 1.2% of the purchase price, find the amount of the license fee. D) If you were to make a down payment of $2500, find the amount of the loan that you would need. E) Assuming you get a loan for 4 years at an interest rate of 7.5% what amount would you need to borrow with the sales tax and license fee included? F) Taking the answer from E) what would your monthly payments be?