The Canton Corporation shows the following income statement. The firm uses FIFO inventory accounting. Sales Cost...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The Canton Corporation shows the following income statement. The firm uses FIFO inventory accounting. Sales Cost of goods sold CANTON CORPORATION Income Statement for 20X1 $ 220,500 112,500 $ 108,000 11,025 (15,000 units at $14.70) (15,000 units at $7.50) Gross profit Selling and administrative expense Depreciation Operating profit Taxes (30%) Aftertax income 11,000 $ 85,975 25,792 $ 60,182 a. Assume in 20X2 the same 15,000-unit volume is maintained but that the sales price increases by 10 percent. Because of FIFO inventory policy, old inventory will still be charged off at $7.50 per unit. Also assume selling and administrative expense will be 5 percent of sales and depreciation will be unchanged. The tax rate is 30 percent. Compute aftertax income for 20X2. Note: Do not round intermediate calculations. Round your answer to the nearest whole number. Aftertax income _ The Canton Corporation shows the following income statement. The firm uses FIFO inventory accounting. Sales Cost of goods sold CANTON CORPORATION Income Statement for 20X1 $ 220,500 112,500 $ 108,000 11,025 (15,000 units at $14.70) (15,000 units at $7.50) Gross profit Selling and administrative expense Depreciation Operating profit Taxes (30%) Aftertax income 11,000 $ 85,975 25,792 $ 60,182 a. Assume in 20X2 the same 15,000-unit volume is maintained but that the sales price increases by 10 percent. Because of FIFO inventory policy, old inventory will still be charged off at $7.50 per unit. Also assume selling and administrative expense will be 5 percent of sales and depreciation will be unchanged. The tax rate is 30 percent. Compute aftertax income for 20X2. Note: Do not round intermediate calculations. Round your answer to the nearest whole number. Aftertax income _
Expert Answer:
Related Book For
Foundations of Financial Management
ISBN: 978-1259277160
16th edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen
Posted Date:
Students also viewed these accounting questions
-
PLEASE SHOW YOUR WORKINGS FOR EACH AND EVERY QUESTION BELOW. Q2) Suppose Alex wants to buy a Range Rover in 5 years' time and estimate that he will need $50000. In a savings account the interest rate...
-
The Canton Corporation shows the following income statement. The firm uses FIFO inventory accounting. a. Assume in 20X2 that the same 17,600-unit volume is maintained, but that the sales price...
-
The Quinn Corporation shows the following income statement. The firm uses FIFO inventory accounting. a. Assume that the same 10,000 unit volume is maintained in 2016, but the sales price increases by...
-
Suppose that we want to know the mass of gasoline in an automobile's gas tank. The tank has a volume of 70 L, and a handbook of fluid properties states that the density of gasoline is 736 kg/m. (1000...
-
We can define a one-to-one correspondence between the elements of Pn and Rn by p(x) = a1 + a2x + . . . + anxn-1 (a1, . . . , an)T = a Show that if p a and q b, then (a) p a for any scalar a. (b)...
-
The accompanying table provides the annual real GDP (in billions of 2009 dollars) and nominal GDP (in billions of dollars) for the United States. a. Calculate the GDP deflator for each year. b. Use...
-
1.9 Comparing Cheap Dates Around the World. Com- parison of prices or costs across different country and currency environments requires translation of the local currency into a single common cur-...
-
Suppose that every driver faces a 1% probability of an automobile accident every year. An accident will, on average, cost each driver $10,000. Suppose there are two types of individuals: those with...
-
Chapter #8 - Quiz i Saved Help Save & Exit Submit Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to a...
-
Q1: (6 Points) For the circuit shown in the following figure. +30 V [Given That: Ip= 4 mA, Ipss = 16 mA, and 3.3 kn VGs(of) =-8 V and ra: = 100 KO] a) Find VDs. b) Determine the output resistance. c)...
-
Provide a summary of different Ipv6 routing protocols. How are they similar to IPv4 protocols? How are they different? What is SLAAC (Stateless Address Auto Configuration)? How does it work? What are...
-
Yost received 300 NQOs (each option gives Yost the right to purchase 10 shares of Cutter Corporation stock for $15 per share). At the time he started working for Cutter Corporation three years ago,...
-
Below are amounts (in millions) from three companies' annual reports. Beginning Accounts Receivable Ending Accounts Receivable $2,692 Net Sales $315,427 WalCo TarMart CostGet Required: $1,745 5,816...
-
(b) Consider 2 consumers A and B of a product with individual demand functions QA = 400 - 5PA and QB = 300 - 2PB, respectively. (i) If the product is a private good, analyse the market and solve for...
-
Raise the required amount from a new bond issue. The bond will have a face value of $19,219.86, a coupon rate of 9% per annum, payable semiannually, and a maturity period of 5 years. The market...
-
General Optic Corporation operates a manufacturing plant in Arizona. Due to a significant decline in demand for the product manufactured at the Arizona site, an impairment test is deemed appropriate....
-
Describe the Operations (+,,*,/) that can cause negligible addition (NA), error magnification (EM), or subtractive cancellation (SC) in calculating ?((x^2)+1) - x . Give the range of where they might...
-
Refer to the following financial statements for Crosby Corporation: a) Prepare a statement of cash flows for the Crosby Corporation using the general procedures indicated in Table 2-10. b) Describe...
-
Route Canal Shipping Company has the following schedule for aging of accounts receivable: a. Fill in column (4) for each month. b. If the firm had $1,500,000 in credit sales over the four-month...
-
Convex Mechanical Supplies produces a product with the following costs as of July 1, 20X1: Material...........................$ 6 Labor................................4...
-
\(\left(\frac{2}{5} \times\left(\frac{7}{8}-\frac{2}{3} ight) ight)^{2} \div\left(\frac{4}{9}+\frac{5}{6} ight)+\frac{7}{12}\) Perform the indicated operations. Reduce to lowest terms.
-
\(\frac{3}{8} \times\left(\frac{13}{12}-\frac{35}{36} ight)\) Perform the indicated operations. Reduce to lowest terms.
-
\(\left(\frac{3}{7}+\frac{5}{16} ight)^{2}-\frac{5}{12}\) Perform the indicated operations. Reduce to lowest terms.
Study smarter with the SolutionInn App