Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please help.Thank you. 2. The following are selected ledger accounts of Waterway Corporation at December 31,2020. Naterway's effective tax rate on all items is 20%.

Please help.Thank you.
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
2.
image text in transcribed
image text in transcribed
The following are selected ledger accounts of Waterway Corporation at December 31,2020. Naterway's effective tax rate on all items is 20%. A physical inventory indicates that the ending inventory is $686,000. Prepare a condensed 2020 income statement for Waterway Corporation. (Round earnings per share to 2 decimal places, eg. 1 . Tony Long has just learned he has won a $512,400 prize in the lottery. The lottery has given him two options for receiving the payments. (1) If Tony takes all the money today, the state and federal governments will deduct taxes at a rate of 47% immediately. (2) Alternatively, the lottery offers. Tony a payout of 20 equal payments of $39.900 with the first payment occurring when Tony turns in the winning ticket. Tony will be taxed on each of these payments at a rate of 26%. Click here to view factor tables Compute the present value of the cash flows for lump sum payout ( Round factor values to 5 decimal ploces, eg. 1.25124 and final answer to 0 decimal ploces, es. 458,581 .) Lump sum payout Assuming Tony can earn an 100 rate of return (compounded annually) on any money irvested during this period, compute the present value of the cash flows for annuity payout. (Round foctor values to 5 decimal pleces, es. 1.25124 and final answer to 0 decimal ploces, es. 458.581. Preserit valun of annuity payouf Assuming Tory can earn an 10% rate of return (compounded annually) on any money invested during this period, compute the present value of the cash flows for annuity payout. (Round foctor values to 5 decimal ploces, es. 1.25124 and final answer to 0 decimal ploces, eg. 458,581.) Present value of annuity payout Which pay-out option should he choose

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

Accounting Information Systems Controls And Processes

Authors: Leslie Turner, Andrea B. Weickgenannt, Mary Kay Copeland

5th Edition

1119989485, 9781119989486

More Books

Students also viewed these Accounting questions

Question

=+a) What kind of study was this?

Answered: 1 week ago

Question

Did you trace the accomplishments, issues, and milestones?

Answered: 1 week ago