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6.5 6 points Solaris Corporation prepared the following estimates for the four quarters of the current year: Sales Cost of goods sold Administrative costs Advertising costs Executive bonuses First Quarter $ 1,525,000 454,000 Second Quarter $ 1,830,000 534,000 230,000 Third Quarter $ 2,135,000 604,000 235,000 Fourth Quarter $ 2,440,000 654,000 245,000 ཙིཏྟཱ 0 400,000 0 160,000 0 0 0 0 0 0 0 eBook Annual maintenance costs 90,000 0 64,000 82,000 0 Provision for bad debts Additional Information • First-quarter administrative costs include the $140,000 annual insurance premium. • Advertising costs paid in the second quarter relate to television advertisements that will be broadcast throughout the entire year. • No special items affect income during the year. ⚫ The company estimates an effective income tax rate for the year of 25 percent. a. Assuming that actual results do not vary from the estimates provided, determine the amount of net income to be reported each quarter of the current year. b. Assume that actual results do not vary from the estimates provided except for that in the third quarter, the estimated annual effective income tax rate is revised downward to 22 percent. Determine the amount of net income to be reported each quarter of the current year. Period Net Income a. 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter b. 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

6.5 6 points Solaris Corporation prepared the following estimates for the four quarters of the current year: Sales Cost of goods sold Administrative costs Advertising costs Executive bonuses First Quarter $ 1,525,000 454,000 Second Quarter $ 1,830,000 534,000 230,000 Third Quarter $ 2,135,000 604,000 235,000 Fourth Quarter $ 2,440,000 654,000 245,000 ཙིཏྟཱ 0 400,000 0 160,000 0 0 0 0 0 0 0 eBook Annual maintenance costs 90,000 0 64,000 82,000 0 Provision for bad debts Additional Information • First-quarter administrative costs include the $140,000 annual insurance premium. • Advertising costs paid in the second quarter relate to television advertisements that will be broadcast throughout the entire year. • No special items affect income during the year. ⚫ The company estimates an effective income tax rate for the year of 25 percent. a. Assuming that actual results do not vary from the estimates provided, determine the amount of net income to be reported each quarter of the current year. b. Assume that actual results do not vary from the estimates provided except for that in the third quarter, the estimated annual effective income tax rate is revised downward to 22 percent. Determine the amount of net income to be reported each quarter of the current year. Period Net Income a. 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter b. 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

Survey of Accounting (Accounting I)
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter11: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 11.6.2MBA
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6.5 6 points Solaris Corporation prepared the following estimates for the four quarters of the current year: Sales Cost of goods sold Administrative costs Advertising costs Executive bonuses First Quarter $ 1,525,000 454,000 Second Quarter $ 1,830,000 534,000 230,000 Third Quarter $ 2,135,000 604,000 235,000 Fourth Quarter $ 2,440,000 654,000 245,000 ཙིཏྟཱ 0 400,000 0 160,000 0 0 0 0 0 0 0 eBook Annual maintenance costs 90,000 0 64,000 82,000 0 Provision for bad debts Additional Information • First-quarter administrative costs include the $140,000 annual insurance premium. • Advertising costs paid in the second quarter relate to television advertisements that will be broadcast throughout the entire year. • No special items affect income during the year. ⚫ The company estimates an effective income tax rate for the year of 25 percent. a. Assuming that actual results do not vary from the estimates provided, determine the amount of net income to be reported each quarter of the current year. b. Assume that actual results do not vary from the estimates provided except for that in the third quarter, the estimated annual effective income tax rate is revised downward to 22 percent. Determine the amount of net income to be reported each quarter of the current year. Period Net Income a. 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter b. 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Transcribed Image Text:6.5 6 points Solaris Corporation prepared the following estimates for the four quarters of the current year: Sales Cost of goods sold Administrative costs Advertising costs Executive bonuses First Quarter $ 1,525,000 454,000 Second Quarter $ 1,830,000 534,000 230,000 Third Quarter $ 2,135,000 604,000 235,000 Fourth Quarter $ 2,440,000 654,000 245,000 ཙིཏྟཱ 0 400,000 0 160,000 0 0 0 0 0 0 0 eBook Annual maintenance costs 90,000 0 64,000 82,000 0 Provision for bad debts Additional Information • First-quarter administrative costs include the $140,000 annual insurance premium. • Advertising costs paid in the second quarter relate to television advertisements that will be broadcast throughout the entire year. • No special items affect income during the year. ⚫ The company estimates an effective income tax rate for the year of 25 percent. a. Assuming that actual results do not vary from the estimates provided, determine the amount of net income to be reported each quarter of the current year. b. Assume that actual results do not vary from the estimates provided except for that in the third quarter, the estimated annual effective income tax rate is revised downward to 22 percent. Determine the amount of net income to be reported each quarter of the current year. Period Net Income a. 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter b. 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
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