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    susans1980 Posts: 2, Reputation: 1
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    Nov 3, 2011, 08:15 PM
    please help!
    can you please help me with 2 assignment questions I am struggling on! Thank you so much!

    1) Goodwin Enterprises had a gross profit of $2,500,000 for the year. Operating expenses and interest expense incurred in that same year were $595,000 and $362,000, respectively. Goodwin had 200,000 shares of common stock and 180,000 shares of preferred stock outstanding. Management declared a $2.50 dividend per share on the common and a $1.50 dividend per share on the preferred. Securities purchased at a cost of $37,500 in a previous year were resold at a price of $50,500. Compute the taxable income and the resulting tax liability for Goodwin Enterprises for the year.

    Use the following tax rates:
    Income Tax rate
    $0-$50,000 15%
    $50,001-$75,000 25%
    $75,001-$100,000 34%
    $100,001-$335,000 39%
    over $335,001 34%


    2) Stan's Cans, Inc. expects to earn $150,000 next year after taxes on sales of $2,200,000. Stan's manufactures only one size of garbage can and is located in the small, but beautiful, town of Mount Dora, Florida. Stan sells his cans for $8 a piece and they have a variable cost of $2.40 a piece. Stan's tax rate is currently 34%.

    a. What are the firm's expected fixed costs for next year?
    b. What is the break-even point in units?

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