Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Noventis Corporation prepared the following estimates for the four quarters of the current year: First Quarter Second Quarter Third Quarter Fourth Quarter Sales $ 1,400,000

Noventis Corporation prepared the following estimates for the four quarters of the current year:

First Quarter Second Quarter Third Quarter Fourth Quarter
Sales $ 1,400,000 $ 1,680,000 $ 1,960,000 $ 2,240,000
Cost of goods sold 440,000 520,000 590,000 640,000
Administrative costs 330,000 195,000 200,000 210,000
Advertising costs 0 140,000 0 0
Executive bonuses 0 0 0 84,000
Provision for bad debts 0 0 0 68,000
Annual maintenance costs 76,000 0 0 0

Additional Information

  • First-quarter administrative costs include the $180,000 annual insurance premium.
  • Advertising costs paid in the second quarter relate to television advertisements that will be broadcast throughout the entire year.
  • No special items affect income during the year.
  • Noventis estimates an effective income tax rate for the year of 40 percent.

  1. Assuming that actual results do not vary from the estimates provided, determine the amount of net income to be reported each quarter of the current year.

  2. Assume that actual results do not vary from the estimates provided except for that in the third quarter, the estimated annual effective income tax rate is revised downward to 38 percent. Determine the amount of net income to be reported each quarter of the current year.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Tracking Your Trek Looking Backward To Determine Your Forward

Authors: Erica Pauly

1st Edition

979-8839157330

More Books

Students also viewed these Accounting questions

Question

5. If yes, then why?

Answered: 1 week ago

Question

6. How would you design your ideal position?

Answered: 1 week ago