Chapter 1, Problem 1.18E

Describe steps that the Zambian government can take to ensure greater tax compliance among individual and corporate tax payers.

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Plug Products owns 80 percent of the stock of Spark Filter Company, which it acquired at underlying book value on August 30, 20X6. At that date, the fair value of the noncontrolling interest was equal to 20 percent of the book value of Spark Filter. Summarized trial balance data for the two companies as of December 31, 20X8, are as follows:   Plug Products Spark Filter Company Credit Debit Credit Debit Cash and Accounts Receivable $ 146,000   $ 95,000   Inventory 236,000   119,000   Buildings and Equipment (net) 288,000   187,000   Investment in Spark Filter Company 267,789       Cost of Goods Sold 172,000   137,000   Depreciation Expense 40,000   30,000   Current Liabilities   $ 170,147   $ 53,947 Common Stock   192,000   73,000 Retained Earnings   460,000   216,000 Sales   275,053   225,053 Income from Spark Filter Company   52,589     Total $ 1,149,789 $ 1,149,789 $ 568,000 $ 568,000 On January 1, 20X8, Plug's inventory contained filters purchased…

Volume-based rates produce inaccurate product cost when:   Multiple Choice   A large portion of factory overhead cost is not volume-based.   Firms produce a diverse mix of products.   Large volumes of a product are manufactured.   Both a lack of volume-based overhead and there is a large range of products.   None of these answer choices are correct.

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