Chapter 2, Problem 2DYS

Reese, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December, she received a $20,000 bill from her accountant for consulting services related to her small business. Reese can pay the $20,000 bill anytime before January 30 of next year without penalty. Assume Reese's marginal tax rate is 32 percent this year and 35 percent next year, and that she can earn an after-tax rate of return of 12 percent on her investments.   a. What is the after-tax cost if she pays the $20,000 bill in December?            b. What is the after-tax cost if she pays the $20,000 bill in January? Use Exhibit 3.1.           c. Should Reese pay the $20,000 bill in December or January?       multiple choice 1 December January   d. What is the after-tax cost if she expects her marginal tax rate to be 24 percent next year and pays the $20,000 bill in January? Use Exhibit 3.1. (Round your answer to the nearest whole dollar amount.)            e. Should Reese…

Entries to revenues accounts such as Service Revenues are usually __________..

Crane Company accumulates the following data concerning a mixed cost, using units produced as the activity level. Units Produced Total Cost March 9,970 $20,005 April 8,930 18,154 May 10,500 20,538 June 8,710 17,674 July 9,370 18,604 (a1) Compute the unit variable costs using the high-low method. (Round your answers to two decimal places (e.g., 2.25).) Variable cost +A $ per unit

Solve this accounting qn

Hank, a calendar-year taxpayer, uses the cash method of accounting for his sole proprietorship. In late December, he performed $20,000 of legal services for a client. Hank typically requires his clients to pay his bills immediately upon receipt. Assume his marginal tax rate is 32 percent this year and will be 37 percent next year, and that he can earn an after-tax rate of return of 12 percent on his investments.  a. What is the after-tax income if Hank sends his client the bill in December?            b. What is the after-tax income if Hank sends his client the bill in January? Use Exhibit 3.1. (Round your answer to the nearest whole dollar amount.)            c. Based on requirements a and b, should Hank send his client the bill in December or January?       multiple choice December January

Assets minus liabilities equals __________.

What are the main sections on a balance sheet?   Assets, liabilities, income Assets, liabilities, equity Assets, liabilities, expenses Assets, gains, revenue

2. The main Purpose of Financial Accounting is? To Provide financial information to shareholders To maintain balance sheet To minimize taxes. To keep track of liabilities.

A company that uses the cash basis of accounting will:   Record revenue when it is collected. Record revenue when it is earned. Record revenue at the same time as accounts receivable. Record bad debt expense on the income statement.