Need answer for this account questions. please follow all numbers A consumer electronics company was formed to develop cell phonesthat run on or are recharged by fuel cells. The company purchased awarehouse and converted it into a manufacturing plant for $6,000,000.It completed the installation of assembly equipment worth $1,500,000on December 31. The plant began operation on January 1. Thecompany had a gross income of $8,500,000 for the calendar year.Manufacturing costs and all operating expenses, excluding the capitalexpenditures, were $2,280,000. The depreciation expenses for capitalexpenditures amounted to $456,000.a) Compute the taxable income of this company.b) How much will the company pay in federal income taxes for theyear?

a) To compute taxable income:Start with gross income: $8,500,000Subtract total expenses:…

Answered: A consumer electronics company was…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A consumer electronics company was formed to develop cell phones that run on or are recharged by fuel cells. The company purchased a warehouse and converted it into a manufacturing plant for $8,000,000. It completed installation of assembly equipment worth $1,700,000 on December 31st. The plant began operation on January 1st. The company had a gross income of $8,600,000 for the calendar year. Manufacturing costs and all operating expenses, excluding the capital expenditures, were $2,170,000. The depreciation expenses for capital expenditures amounted to $465,000. The corporate tax rate is 21%. (a) Compute the taxable income of this company. The taxable income of this company is $ 5965000. (Round to the nearest dollar.) (b) How much will the company pay in federal income taxes for the year? The federal income taxes for the year will be $ (Round to the nearest dollar.)
On 1 June 20X1, Galaxy Co. purchased a new machine for use in its factory. The directors have capitalised the purchase price but are unsure how to treat the following related costs. 350,000 was spent on testing whether the machine was functioning properly. During the testing period (June — October 20X1), samples were produced and sold for a total of 75,000. 400,000 was also spent on training existing employees how to operate the new machine. The machine is being used to manufacture a new product, Product C and 1 million was spent on advertising this new product. Testing was completed and commercial production of Product C commenced on 31 October 20X1. Required: Advise Galaxy on how the above transactions should be dealt with in its financial statements for the year ended 31 December 20X1.
Spacely Sprockets, Inc. invested $4,995,000 for new manufacturing equipment for its plant in Jetson, NY. The equipment was anticipated to have a useful life of 11 years, or 29,800 machine hours and a residual value of $507,000. In its first year in operation the equipment was used for 2,180 hours and an additional 2,700 hours in its second year of usage.The Income Statement for years 1 and 2 of Spacely Sprockets, Inc. are shown below.All items rounded to nearest whole dollar. Spacely Sprockets, Inc. Year 1 Year 2 Net Sales $35,590,000 $36,164,000 COGS $23,120,000 $22,978,000 Gross Profit $12,470,000 $13,186,000 Operating Expenses(before adding in Depreciation) $7,650,000 $8,152,000 Income from Operations $4,820,000 $5,034,000 Income Tax Expense (at 30%) $1,446,000 $1,510,200 Net Income $3,374,000 $3,523,800 Round all items to the nearest whole dollar and use rounded values for all future calculations.1. Calculate the depreciation expense for year 1 and 2 using…
Munabhai
During year 1, Finch Manufacturing Company incurred $115,000,000 of research and development (R&D) costs to create a long-life battery to use in computers. In accordance with FASB standards, the entire R&D cost was recognized as an expense in year 1. Manufacturing costs (direct materials, direct labor, and overhead) are expected to be $50 per unit. Packaging, shipping, and sales commissions are expected to be $18 per unit. Finch expects to sell 2,500,000 batteries before new research renders the battery design technologically obsolete. During year 1, Finch made 438,000 batteries and sold 392,000 of them. Required a. Identify the upstream and downstream costs. b. Determine the year 1 amount of cost of goods sold and the ending inventory balance that would appear on the financial statements that are prepared in accordance with GAAP. c. Determine the sales price assuming that Finch desires to earn a profit margin that is equal to 30 percent of the total cost of developing, making, and…
On January 1, Manning Co. purchases and installs a new machine costing $324,000 with a five-year life and an estimated $30,000 salvage value. Management estimates the machine will produce 1,470,000 units of product during its life. Actual production of units is as follows: 355,600 in Year 1, 320,400 in Year 2, 317,000 in Year 3, 343,600 in Year 4, and 138,500 in Year 5. The total number of units produced by the end of Year 5 exceeds the original estimate—this difference was not predicted. Note: The machine cannot be depreciated below its estimated salvage value. Required: Prepare a table Units-of-production: Year Number of Units Depreciation per Unit Depreciation Expense 1 2 3 4 5 Totals Double-declining-balance: Year Beginning Book Value Annual Depreciation (40% of book value) Accumulated Depreciation at Year-End Ending Book Value ($324,000 Cost less Accumulated Depreciation) 1 2…
Vala
During year 1, Adams Manufacturing Company incurred $118,900,000 of research and development (R&D) costs to create a long-life battery to use in computers. In accordance with FASB standards, the entire R&D cost was recognized as an expense in year 1. Manufacturing costs (direct materials, direct labor, and overhead) are expected to be $40 per unit. Packaging, shipping, and sales commissions are expected to be $19 per unit. Adams expects to sell 2,900,000 batteries before new research renders the battery design technologically obsolete. During year 1, Adams made 432,000 batteries and sold 393,000 of them. Required a. Identify the upstream and downstream costs. b. Determine the year 1 amount of cost of goods sold and the ending inventory balance that would appear on the financial statements that are prepared in accordance with GAAP. c. Determine the sales price assuming that Adams desires to earn a profit margin that is equal to 25 percent of the total cost of developing, making, and…
During year 1, Baird Manufacturing Company Incurred $65,800,000 of research and development (R&D) costs to create a long-life battery to use in computers. In accordance with FASB standards, the entire R&D cost was recognized as an expense in year 1. Manufacturing costs (direct materials, direct labor, and overhead) are expected to be $78 per unit. Packaging, shipping, and sales commissions are expected to be $7 per unit. Baird expects to sell 1,400,000 batteries before new research renders the battery design technologically obsolete. During year 1, Baird made 432,000 batteries and sold 405,000 of them. Required a. Identify the upstream and downstream costs. b. Determine the year 1 amount of cost of goods sold and the ending Inventory balance that would appear on the financial statements that are prepared in accordance with GAAP. c. Determine the sales price assuming that Baird desires to earn a profit margin that is equal to 30 percent of the total cost of developing, making, and…
During year 1, Perez Manufacturing Company incurred $117,500,000 of research and development (R&D) costs to create a long-life battery to use in computers. In accordance with FASB standards, the entire R&D cost was recognized as an expense in year 1. Manufacturing costs (direct materials, direct labor, and overhead) are expected to be $64 per unit. Packaging, shipping, and sales commissions are expected to be $11 per unit. Perez expects to sell 2,500,000 batteries before new research renders the battery design technologically obsolete. During year 1, Perez made 434,000 batteries and sold 395,000 of them. Fill in the GAAP-based income statement for year 1. Use the sales price = 93.75 PEREZ MANUFACTURING COMPANY Income Statement Sales revenue Cost of goods sold Gross margin Depreciation expense Inventory holding expense Research & development expense Net income (loss) 0 $0 F
Road Warrior Corporation began operations early in the current year, building luxury motor homes. During the year, the company started and completed 50 motor homes at a cost of $60,000 per unit. Of these, 48 were sold for $95,000 each and two remain in finished goods inventory. In addition, the company had six partially completed units in its factory at year-end. Total costs for the year (summarized alphabetically) were as follows: $ 737,000 900,000 Direct materials used Direct labor General and administrative 500,000 expenses Income tax expense Manufacturing overhead Selling expenses 100,000 1,520,000 500,000 Instructions a. Compute the total manufacturing costs charged to work in process for the current year: Total manufacturing costs b. Compute the cost of finished goods manufactured for the current year: Cost of finished goods manufactured
Jay

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