You own a construction company with a revenue of $395,000. The direct costs of construction are $280,000.Your annual general overhead is $22,000, which includes $3500 in meals and entertainment; $3000 in officeutilities; $2500 for office laptop; $8000 for office desks and chairs; $500 for office supplies; and miscellaneous.The allowed depreciation for office utilities is $50; for office laptop is $200; and for office desks and chairs is$85; and for office supplies is $15.In addition, the past allowed depreciation amounted to $300.During the year you also earned $8000 in dividends and $800 in interest. Determine your net taxable incomefrom construction business and marginal net taxable income. The income tax rate for the company is 25%.Calculate the net profit of the company.

Net Taxable Income: The Starting Point for TaxesGross Profit: We begin by calculating the gross…

Answered: You own a construction company with a…

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter9: Acquisitions Of Property

Section: Chapter Questions

Problem 46P

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A company rents a building with a total of 80,000 square feet, which are evenly divided between two floors. The total monthly rent for the building is $75,000. The company allocates $50,000 of total rent expense to the first floor and $25,000 of total rent expense to the second floor. How much of the monthly rental expense should be allocated to a department that occupies 16,000 square feet on the first floor?
How would each of the following costs be classified if units produced is the activity base? a. Salary of factory supervisor ($120,000 per year) b. Straight-line depreciation of plant and equipment c. Property rent of $11,500 per month on plant and equipment
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The Maria Company estimated its factory overhead of the next period at P160,000. It is estimated that 40,000 units will be produced at a materials cost of P200,000. Production will require 40,000 man-hours at an estimated wage cost of P80,000. The machines will run about 25,000 hours. How much is the Machine Depreciation Cost Driver rate?
A coal mine expected to contain 6.5 milliontons of coal was purchased at a cost of $30 million.One million tons of coal for steel making are produced this year. The gross income for this coal is$15,000,000 and operating costs (excluding depletion expenses) are $1,850,000. If you know that coalhas a 10% depletion allowance, what will be thedepletion allowance?(a) Cost depletion.(b) Percentage depletion
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You are considering two types of machines fora manufacturing process.◼◼ Machine A has a first cost of $75,200, and itssalvage value at the end of six years of estimatedservice life is $21,000. The operating costs ofthis machine are estimated to be $6,800 per year.Extra income taxes are estimated at $2,400 peryear.◼◼ Machine B has a first cost of $44,000, and itssalvage value at the end of six years’ service isestimated to be negligible. The annual operatingcosts will be $11,500.Compare these two mutually exclusive alternativesby the present-worth method at i = 13%
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A machine costing P 95,000 is expected to produce 10,000 units of a certain products during its entire life before being replaced. At the end of its life, it will have a scrap value of P 5,000. The cost of housing the machine is P 2,500 a year. The power consumption per unit is P 0.90 and the maintenance of the machine per unit will be P 0.70. Labor costs P 3.50 per unit. If depreciation is by declining balance method, determine the cost per unit in its 3rd year of operation if the annual production is 2500 units.

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