The following cash flows are identified as either a benefit, disbenefit, or cost. Identify which ones are disbenefit. * O Loss of income to local businesses because of a new freeway $400,000 annual income to local businesses because of tourism created by a national park O Revenue to local motels because of an extended weekend holiday Decrease in property values due to the closure of a government research lab

The following cash flows are identified as either a benefit, disbenefit, or cost. Identify which ones are disbenefit. * O Loss of income to local businesses because of a new freeway $400,000 annual income to local businesses because of tourism created by a national park O Revenue to local motels because of an extended weekend holiday Decrease in property values due to the closure of a government research lab

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 rice plantation in Pampanga was destroyed by locust infestation starting 2016. By the end of the year, more three-fourth (3/4) of the plantation was worthless. Towards the middle of 2017, the plantation was totally destroyed. When should the loss be deducted? А. 2016 C. Any year as the taxpayer chooses D. Cannot deduct in any year В. 2017
Identify a reason why Social Security as it currently exists is unsustainable in the long run. The overall U.S. population is shrinking because of decreasing life expectancy, so soon there would not be enough taxpayers to fund A. the Social Security program. B. Income tax revenues that form the largest source of funds for Social Security programs are projected to decline in the long run. OC. Individual income that is subject to Social Security taxes is capped at about $117,000. D. Corporate income that is subject to Social Security taxes is capped at $1 million.
Answer the following questions: 2. The City of Miami is about to replace an old fire truck with a new vehicle in an effort to save maintenance and other operating costs. Which of the following items, all related to the transaction, would be considered in the decision? a. Purchase price of the new vehicle. b. Purchase price of the old vehicle. c. savings in operating costs as a result of the new vehicle. d. Proceeds from disposal of the old vehicle. 3. The book value of the equipment currently owned by a firm is an example of a(n): a. future cost. b. differential cost. c. comparative cost. d. opportunity cost. e. sunk cost. 4. An accounting information system should be designed to provide information that is useful. To be useful the information must be: a. qualitative rather than quantitative. b. unique and unavailable through other sources. c. historical in nature and not purport to predict the future. d. marginal between two…
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The following relates to the town of Coupland (Dollar amounts in thousands): Equipment used in a vehicle repair service that provides service to other departments on a cost-reimbursement basis; the equipment has a 5-year life with no salvage value $1,400 Property taxes levied and collected $6,300 Hotel taxes (restricted to promotion of tourism) collected $1,200 Proceeds of bonds to build a parking garage that must be repaid from user charges $4,000 Using the information above to answer the following questions: Revenue to be recognized In internal service fund? A.) 0 B.) $1,400 C.) $140 D.) None of above
After-Tax Cash Flows Warren Company plans to open a new repair service center for one of its electronic products. The center requires an investment in depreciable assets costing $460,000. The assets will be depreciated on a straight-line basis, over four years, and have no expected salvage value. The annual income statement for the center is given below. Revenues $480,000 Less: Cash operating expenses (192,000) Depreciation (115,000) Income before income taxes $173,000 Less: Income taxes (@40%) 69,200 Net income $103,800 Required: 1. Using the income approach, calculate the after-tax cash flows.$fill in the blank 1 2. Using the decomposition approach, calculate the after-tax cash flows for each item of the income statement and show that the total is the same as the income approach. Enter cash expenses as negative amounts and noncash expenses as positive amounts. Revenue (after tax) $fill in the blank Cash expenses (after tax) fill in the blank…
Allocated on the basis of program revenues. The head administrator of Jackson County Senior Services, Judith Miyama, considers last year's net operating income of $33,800 to be unsatisfactory; therefore, she is considering the possibility of discontinuing the housekeeping program. The depreciation in housekeeping is for a small van that is used to carry the housekeepers and their equipment from job to job. If the program were discontinued, the van would be donated to a charitable organization. None of the general administrative overhead would be avoided if the housekeeping program were dropped, but the liability insurance and the salary of the program administrator would be avoided. Required: 1-a. What is the financial advantage (disadvantage) of discontinuing the Housekeeping program? 1-b. Based on the financial advantage (disadvantage) of discontinuing the Housekeeping program calculated in requirement Req 1A, should the Housekeeping program be discontinued? 2-a. Prepare a properly…
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Why? Revenue Recognition at a Point in Time versus Revenue Recognition Over Time. The Markert Com- 23 pany won a contract to build a shopping center at a price of $300 million. The following schedule details the estimated and actual costs of construction and the actual cash collections under the contract: Estimated (Actual) Costs of Construction Cash Collections from Customer 087 Year 1.. Year 2.. Year 3.. Year 4.. $ 40,000,000 60,000,000 70,000,000 30,000,000 $ 60,000,000 75,000,000 75,000,000 90,000,000 $200,000,000 $300,000,000 deb Required 1. Prepare an income statement for the Markert Company for each year assuming that the company recognizes revenue at a point in time. 2. Prepare an income statement for the Markert Company for each year assuming that the company recognizes revenue over time. 3. Which set of income statements best reflects the actual performance of the Markert Company? Why? bns bor