MYLAB EXCELLENCE IN BUSSI COMM ETEXT
12th Edition
ISBN: 9780135854907
Author: BOVEE
Publisher: PEARSON
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Chapter 6, Problem 6.1AYK
Summary Introduction
To determine:
Briefly explain how careful revision can reflect the “you” attitude.
Introduction:
The “you” attitude means that any document that is created, takes an audience-centered approach. This helps the reader to understand it in an easier manner.
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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…
Chapter 6 Solutions
MYLAB EXCELLENCE IN BUSSI COMM ETEXT
Ch. 6 - Prob. 1CACh. 6 - Prob. 2CACh. 6 - Prob. 1LOCCh. 6 - Prob. 2LOCCh. 6 - Prob. 3LOCCh. 6 - Prob. 4LOCCh. 6 - Prob. 5LOCCh. 6 - Prob. 6LOCCh. 6 - Prob. 7LOCCh. 6 - Prob. 8LOC
Ch. 6 - Prob. 9LOCCh. 6 - Prob. 10LOCCh. 6 - Prob. 11LOCCh. 6 - Prob. 12LOCCh. 6 - Prob. 13LOCCh. 6 - Prob. 14LOCCh. 6 - Prob. 15LOCCh. 6 - Prob. 16LOCCh. 6 - Prob. 17LOCCh. 6 - Prob. 18LOCCh. 6 - Prob. 19LOCCh. 6 - Prob. 6.1AYKCh. 6 - Prob. 6.2AYKCh. 6 - Prob. 6.3AYKCh. 6 - Prob. 6.4AYKCh. 6 - Prob. 6aPYSCh. 6 - Prob. 6bPYSCh. 6 - Prob. 6cPYSCh. 6 - Prob. 6.5ECh. 6 - Prob. 6.6ECh. 6 - Prob. 6.7ECh. 6 - Prob. 6.8ECh. 6 - Prob. 6.9ECh. 6 - Prob. 6.10ECh. 6 - Prob. 6.11ECh. 6 - Prob. 6.12ECh. 6 - Prob. 6.13ECh. 6 - Prob. 6.14ECh. 6 - Prob. 6.15ECh. 6 - Prob. 6.16ECh. 6 - Prob. 6.17ECh. 6 - Prob. 6.18ECh. 6 - Prob. 6.19ECh. 6 - Prob. 6.20ECh. 6 - Prob. 6.21ECh. 6 - Prob. 6.22ECh. 6 - Prob. 6.23ECh. 6 - Prob. 6.24ECh. 6 - Prob. 6.25ECh. 6 - Prob. 1EYSCTPCh. 6 - Prob. 1SYCKO
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