
Accounting Information Systems
9th Edition
ISBN: 9781133934400
Author: James A. Hall
Publisher: Cengage Learning
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Chapter 12, Problem 8DQ
To determine
Explain the term cookies and mention the reasons for which they are used.
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Seiko's current salary is $101,000. Her marginal tax rate is 32 percent, and she fancies European sports cars. She
purchases a new auto each year. Seiko is currently a manager for Idaho Office Supply. Her friend, knowing of her interest
in sports cars, tells her about a manager position at the local BMW and Porsche dealer. The new position pays $84,600
per year, but it allows employees to purchase one new car per year at a discount of $19,400. This discount qualifies as a
nontaxable fringe benefit. In an effort to keep Seiko as an employee, Idaho Office Supply offers her a $10,500 raise.
Answer the following questions about this analysis.
a. What is the annual after-tax cost to Idaho Office Supply if it provides Seiko with the $10,500 increase in salary?
Note: Ignore payroll taxes.
After-tax cost
Required information
[The following information applies to the questions displayed below.]
Nicole's employer, Poe Corporation, provides her with an automobile allowance of $42,000 every other year. Her marginal
tax rate is 32 percent. Answer the following questions relating to this fringe benefit.
b. What is Poe's after-tax cost of providing the auto allowance?
> Answer is complete but not entirely correct.
After-tax cost
$ 28,560
100%, equity, ending inventory. On January 1, 2015, 100% of the outstanding stock of Solo Company was purchased by Plato Corporation for $3,300,000. At that time, the book value of Solo’s net assets equaled $3,000,000. The excess was attributable to equipment with a 10-year life.
The following trial balances of Plato Corporation and Solo Company were prepared on December 31, 2015:
Plato Corporation
Solo Company
Cash
735000
37000
Accounts Receivable
400000
365000
Inventory
600000
275000
Property,Plato and Equipment
4000000
2300000
Investment in Solo company
3510000
Accounts Payable
(35000)
(100000)
Common stock ($10 par)
(1000000)
(400000)
Paid-in capital in excess of par
(1500000)
(200000)
Retained earnings, Jan 1, 2015
(5,500,000)
(2,400,000)
Sales
(12,000,000)
(1,000,000)
Cost of goods sold
7,000,000
750,000
Other expenses
4,000,000
40,000
Subsidiary income…
Chapter 12 Solutions
Accounting Information Systems
Ch. 12 - Prob. 1RQCh. 12 - Prob. 2RQCh. 12 - Prob. 3RQCh. 12 - Prob. 4RQCh. 12 - Prob. 5RQCh. 12 - Prob. 6RQCh. 12 - Prob. 7RQCh. 12 - Prob. 8RQCh. 12 - Prob. 9RQCh. 12 - Prob. 10RQ
Ch. 12 - Prob. 11RQCh. 12 - Prob. 12RQCh. 12 - Prob. 13RQCh. 12 - Prob. 14RQCh. 12 - Prob. 15RQCh. 12 - Prob. 16RQCh. 12 - Prob. 17RQCh. 12 - Prob. 18RQCh. 12 - Prob. 19RQCh. 12 - Prob. 20RQCh. 12 - Prob. 21RQCh. 12 - Prob. 22RQCh. 12 - Prob. 23RQCh. 12 - Prob. 24RQCh. 12 - Prob. 1DQCh. 12 - Prob. 2DQCh. 12 - Prob. 3DQCh. 12 - Prob. 4DQCh. 12 - Prob. 5DQCh. 12 - Prob. 6DQCh. 12 - Prob. 7DQCh. 12 - Prob. 8DQCh. 12 - Prob. 9DQCh. 12 - Prob. 10DQCh. 12 - Prob. 11DQCh. 12 - What is a digital envelope?Ch. 12 - Prob. 13DQCh. 12 - Prob. 14DQCh. 12 - Prob. 15DQCh. 12 - Prob. 16DQCh. 12 - Prob. 17DQCh. 12 - Prob. 18DQCh. 12 - Prob. 19DQCh. 12 - Prob. 1MCQCh. 12 - Prob. 2MCQCh. 12 - Prob. 3MCQCh. 12 - Prob. 4MCQCh. 12 - Prob. 5MCQCh. 12 - Prob. 6MCQCh. 12 - Prob. 7MCQCh. 12 - A system of computers that connects the internal...Ch. 12 - Prob. 9MCQCh. 12 - Prob. 10MCQCh. 12 - Prob. 1PCh. 12 - Prob. 4PCh. 12 - Prob. 5PCh. 12 - Prob. 6PCh. 12 - VIRTUALIZATION Virtualization technology is...Ch. 12 - Prob. 8P
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