A company had a gross income of $45,000 last year. The firm had cash expenses of $23,500. In addition to the cash expenses, the firm bought a piece of land for $10,000. Depreciation expences were $11,575. The taxable income in last year was:
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A company had a gross income of $45,000 last year. The firm had cash expenses of $23,500. In addition to the cash expenses, the firm bought a piece of land for $10,000.
A. $12,555
B. $2,255
C. $1,125
D. $33,265
E. $11,125
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- Last year, Sally's Studio added $2,300 to retained earnings from sales of $66,800. The company had costs of $52,300, dividends of $1,000, and interest paid of $900. The tax rate was 34 percent. What was the amount of the depreciation expense? $8,600 $4,200 $14,500 $9,500 $6,800A firm expanded one of its manufacturing operations inside an existing building. New processing and packaging equipment was purchased for $800,000. Sales revenue for the year was $1.25 million. Operating expenses for that year, not including the capital expenditures, were $360,000. The new equipment qualifies for 100% bonus depreciation. (i) What is the first-year depreciation charge? (ii) What is the first-year taxable income? (iii) What are the federal income taxes for the year?Amazing Brentwood inc bought a long-term asset for $100,000. The asset has a 30% CCA rate. At the end of year 5, the firm sold the asset for 25% of its original value. In the year of 2018, The firm just paid 5420 in dividends and $611 in interest expense. The addition to retained earnings is $397.74 and net new equity is $750. The tax rate is 34 percent. Sales are $6,250 and depreciation is $710. 6. How will issuing more shares affect the capital structure of the company? 7. What does the firm need to do to raise its ROE? 8. Calculate the profit margin ratio of the company and comment on the profitability performance of the company. 9. What type of financial decision is the company making with the expansion? 10. The disagreement among the shareholders, BOD and the managers is popularly points to what in finance?
