Solaris Corporation prepared the following estimates for the four quarters of the current year: Sales Cost...
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Solaris Corporation prepared the following estimates for the four quarters of the current year: Sales Cost of goods sold Administrative costs Advertising costs Executive bonuses Provision for bad debts Annual maintenance costs Additional Information First Quarter Second Quarter Third Quarter Fourth Quarter S 1,200,000 $ 1,440,000 S 1,680,000 $ 1,920,000 420,000 500,000 570,000 620,000 290,000 175,000 180,000 190,000 0 180,000 0 0 0 0 0 68,000 68,000 60,000 0 First-quarter administrative costs include the $140,000 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. The company estimates an effective income tax rate for the year of 25 percent. a. 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. b. 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 22 percent. Determine the amount of net income to be reported each quarter of the current year. Period a. 1st Quarter Net Income 2nd Quarter 3rd Quarter 4th Quarter b. 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Solaris Corporation prepared the following estimates for the four quarters of the current year: Sales Cost of goods sold Administrative costs Advertising costs Executive bonuses Provision for bad debts Annual maintenance costs Additional Information First Quarter Second Quarter Third Quarter Fourth Quarter S 1,200,000 $ 1,440,000 S 1,680,000 $ 1,920,000 420,000 500,000 570,000 620,000 290,000 175,000 180,000 190,000 0 180,000 0 0 0 0 0 68,000 68,000 60,000 0 First-quarter administrative costs include the $140,000 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. The company estimates an effective income tax rate for the year of 25 percent. a. 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. b. 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 22 percent. Determine the amount of net income to be reported each quarter of the current year. Period a. 1st Quarter Net Income 2nd Quarter 3rd Quarter 4th Quarter b. 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
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