Submitted by: Submitted by onewillall
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Pages: 19
Category: Business and Industry
Date Submitted: 11/23/2014 10:06 AM
Construct a balance sheet for Sophie’s Sofas given the following data. (Be sure to list the assets and liabilities in order of their liquidity.) |
| | | |
Cash balances | = | $ | 14,500 |
Inventory of sofas | = | $ | 245,000 |
Store and property | = | $ | 145,000 |
Accounts receivable | = | $ | 26,500 |
Accounts payable | = | $ | 21,500 |
Long-term debt | = | $ | 215,000 |
|
BALANCE SHEET OF SOPHIE’S SOFAS |
Assets | | Liabilities & Shareholders’ Equity | |
Cash | $ | Accounts payable | $ |
Accounts receivable | | Long-term debt | |
Inventory | | Shareholders’ equity | |
Store & property | | | |
| | | |
Total assets | $ | Total liabilities & Shareholders' equity | $ |
| | | |
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Using Table 3.7, calculate the marginal and average tax rates for a single taxpayer with the following incomes: (Do not round intermediate calculations. Round "Average tax rate" to 2 decimal places.) |
| Income | Marginal Tax Rate | Average Tax Rate |
a. | $25,000 | % | % |
b. | $55,000 | % | % |
c. | $320,000 | % | % |
d. | $4,000,000 | % | % |
|
Explanation:
a. |
Taxes = (0.10 × $8,500) + 0.15 × ($25,000 − $8,500) = $3,325 |
Marginal tax rate = 15% |
Average tax rate = $3,325/$25,000 = 0.13300 = 13.30% |
|
b. |
Taxes = (0.10 × $8,500) + 0.15 × ($34,500 − $8,500) + 0.25 × ($55,000 − $34,500) = $9,875 |
Marginal tax rate = 25% |
Average tax rate = $9,875/$55,000 = 0.17955 = 17.95% |
|
c. |
Taxes = (0.10 × $8,500) + 0.15 × ($34,500 − $8,500) + 0.25 × ($83,600 − $34,500) + 0.28 × ($174,400 − $83,600) + 0.33 × ($320,000 − $174,400) = $90,497 |
Marginal tax rate = 33% |
Average tax rate = $90,497/$320,000 = 0.282803 = 28.28% |
|
d. |
Taxes = (0.10 × $8,500) + 0.15 × ($34,500 − $8,500) + 0.25 ×...