In 2020, R and R Company received an advance payment of Php1,000,000, which was subject to tax but not reported in accounting income until 2021. The income statement and tax return showed the following: 2020 2021 Income before tax per income statement 6,000,000.00 9,000,000.00 Income before tax per tax return 7,000,000.00 8,000,000.00 Income tax rate 30% 32%

In 2020, R and R Company received an advance payment of Php1,000,000, which was subject to tax but not reported in accounting income until 2021. The income statement and tax return showed the following: 2020 2021 Income before tax per income statement 6,000,000.00 9,000,000.00 Income before tax per tax return 7,000,000.00 8,000,000.00 Income tax rate 30% 32%

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter11: The Corporate Income Tax

Section: Chapter Questions

Problem 10P

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Rhodes Corporations financial statements are shown after part f. Suppose the federal-plus-state tax corporate tax is 25%. Answer the following questions. a. What is the net operating profit after taxes (NOPAT) for 2020? b. What are the amounts of net operating working capital for both years? c. What are the amounts of total net operating capital for both years? d. What is the free cash flow for 2020? e. What is the ROIC for 2020? f. How much of the FCF did Rhodes use for each of the following purposes: after-tax interest, net debt repayments, dividends, net stock repurchases, and net purchases of short-term investments? (Hint: Remember that a net use can be negative.) Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars)
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