Question
Asked Jan 14, 2019
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I need step by step instructions for the problem e) what is the average income tax rate?
** I know you have to divide total tax expense by the net income before taxes.
So,
For E) the income tax expense is $13,134
Net Income before tax??
Average Tax rate: ??

Revenue : (sales) $144000
(service) $28700

All the taxes :
depreciation tax $10400
Interest expense $2400
Income Tax expense. $13,134
Supplies expense. $12,700

F) if $18,500 of dividends had been declared and paid during year, what was the January 1 2016 balance of retained earnings?

Retained Earnings Dec 31st : $59000
Dividens declared: ???
Retained Earnings January 1st: ???

Please solve and explain thoroughly.

d. Calculate the net income (or loss) for the year ended December 31. 2016
et income
$ 46,566
e. What was the average income tax rate for Pope's Garage for 20162
Average income tax rate
f. If s18 500 of dividends had been declared and paid during the year, what was th
January 1. 2016, balance of retained earnings?
THEI
fained earnings
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d. Calculate the net income (or loss) for the year ended December 31. 2016 et income $ 46,566 e. What was the average income tax rate for Pope's Garage for 20162 Average income tax rate f. If s18 500 of dividends had been declared and paid during the year, what was th January 1. 2016, balance of retained earnings? THEI fained earnings

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Expert Answer

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Step 1

For computing the Average income tax rate, the income tax expenses shall be divided by Net income before tax. 

And for computing the net income before tax, the net income after tax computed in Part-d shall be added with the income tax expenses for the year to arrive at the amount of Net income before tax. And then the Average tax rate shall be computed as described which comes out to be 22%.

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Step 2

For computing the begining balance of Retained earnings when ending balance of Retained earnings, net income for the year and dividend declared during the year is given, the reverse computation of Statement of Retained earnings shall ...

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