The asset turnover ratio for Corporation C, Corporation U and Incorporation Y.

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Answer 1

Question

Chapter 5, Problem 5.4MAD

a.

To determine

To Calculate: The asset turnover ratio for Corporation C, Corporation U and Incorporation Y.

b.

To determine

To identify: The Company that generates revenue from its assets more efficiently.

c.

To determine

To compare: Incorporation Y’s assets turnover ratio with Corporation C and Corporation U’s assets turnover ratio.

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On October 1, 20Y6, Jay Crowley established Affordable Realty, which completed the following transactions during the month: Oct. 1 Jay Crowley transferred cash from a personal bank account to an account to be used for the business in exchange for common stock, $40,000. 2 Paid rent on office and equipment for the month, $4,800. 3 Purchased supplies on account, $2,150. 4 Paid creditor on account, $1,100. 10 5 Earned sales commissions, receiving cash, $18,750. 6 Paid automobile expenses (including rental charge) for month, $1,580, and miscellaneous expenses, $800. 7 Paid office salaries, $3,500. 8 Determined that the cost of supplies used was $1,300. 9 Paid dividends, $1,500.

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 will be 37 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 30? Use Exhibit 3.1. (Round your answer to the nearest whole dollar amount.) Exhibit 3.1 below 4% 5% 6% 7% 8% 9% 10% 11% 12% Year 1 .962 .952 .943 .935 .926 .917 .909 .901 .893 Year 2 .925 .907 .890 .873 .857 .842 .826 .812 .797 Year 3 .889 .864 .840 .816 .794 .772 .751 .731 .712 Year 4 .855 .823 .792 .763 .735 .708 .683 .659 .636 Year 5…

Manny, 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. Manny typically requires his clients to pay his bills immediately upon receipt. Assume Manny’s marginal tax rate is 37 percent this year and 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 Manny sends his client the bill in December? b. What is the after-tax income if Manny sends his client the bill in January? Use Exhibit 3.1. (Round your answer to the nearest whole dollar amount.) Exhibit 3.1 below 4% 5% 6% 7% 8% 9% 10% 11% 12% Year 1 .962 .952 .943 .935 .926 .917 .909 .901 .893 Year 2 .925 .907 .890 .873 .857 .842 .826 .812 .797 Year 3 .889 .864 .840 .816 .794 .772 .751 .731 .712 Year 4 .855 .823 .792 .763 .735 .708 .683 .659 .636 Year 5 .822 .784 .747 .713 .681 .650 .621 .593 .567 Year 6 .790 .746…

Answer 2

Question

Chapter 5, Problem 5.4MAD

a.

To determine

To Calculate: The asset turnover ratio for Corporation C, Corporation U and Incorporation Y.

b.

To determine

To identify: The Company that generates revenue from its assets more efficiently.

c.

To determine

To compare: Incorporation Y’s assets turnover ratio with Corporation C and Corporation U’s assets turnover ratio.

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Answer 3

Question

Chapter 5, Problem 5.4MAD

a.

To determine

To Calculate: The asset turnover ratio for Corporation C, Corporation U and Incorporation Y.

b.

To determine

To identify: The Company that generates revenue from its assets more efficiently.

c.

To determine

To compare: Incorporation Y’s assets turnover ratio with Corporation C and Corporation U’s assets turnover ratio.

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Answer 4

Question

Chapter 5, Problem 5.4MAD

a.

To determine

To Calculate: The asset turnover ratio for Corporation C, Corporation U and Incorporation Y.

b.

To determine

To identify: The Company that generates revenue from its assets more efficiently.

c.

To determine

To compare: Incorporation Y’s assets turnover ratio with Corporation C and Corporation U’s assets turnover ratio.

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Answer 5

Chapter 5, Problem 5.4MAD

a.

To determine

To Calculate: The asset turnover ratio for Corporation C, Corporation U and Incorporation Y.

b.

To determine

To identify: The Company that generates revenue from its assets more efficiently.

c.

To determine

To compare: Incorporation Y’s assets turnover ratio with Corporation C and Corporation U’s assets turnover ratio.

Answer 6

Chapter 5, Problem 5.4MAD

a.

To determine

To Calculate: The asset turnover ratio for Corporation C, Corporation U and Incorporation Y.

Answer 7

Chapter 5, Problem 5.4MAD

a.

To determine

To Calculate: The asset turnover ratio for Corporation C, Corporation U and Incorporation Y.

Answer 8

b.

To determine

To identify: The Company that generates revenue from its assets more efficiently.

Answer 9

b.

To determine

To identify: The Company that generates revenue from its assets more efficiently.

Answer 10

c.

To determine

To compare: Incorporation Y’s assets turnover ratio with Corporation C and Corporation U’s assets turnover ratio.

Answer 11

c.

To determine

To compare: Incorporation Y’s assets turnover ratio with Corporation C and Corporation U’s assets turnover ratio.

Answer 12

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Answer 13

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Answer 14

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Answer 15

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The asset turnover ratio for Corporation C, Corporation U and Incorporation Y.

Solution Summary: The author calculates the asset turnover ratio for Corporation C, Corporation U, and Incorporation Y.

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To Calculate: The asset turnover ratio for Corporation C, Corporation U and Incorporation Y.

To identify: The Company that generates revenue from its assets more efficiently.

To compare: Incorporation Y’s assets turnover ratio with Corporation C and Corporation U’s assets turnover ratio.

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Chapter 5 Solutions