What is the after-tax income

Assignment Help Financial Accounting
Reference no: EM132472152

Problem - Hank, a calendar-year taxpayer, uses the cash method of accounting for his sole proprietorship. In late December, he performed $33,000 of legal services for a client. Hank typically requires his clients to pay his bills immediately upon receipt. Assume his marginal tax rate is 32 percent this year and will be 37 percent next year, and that he can earn an after-tax rate of return of 7 percent on his investments.

Required -

a. What is the after-tax income if Hank sends his client the bill in December?

b. What is the after-tax income if Hank sends his client the bill in January?

c. Based on requirement a and b, should Hank send his client the bill in December or January?

Reference no: EM132472152

Questions Cloud

Prepare journal entries to record the events : Question - Striking Furs imports furs from Canada. In the space provided below, prepare journal entries to record the following events
What is the amount of profit or loss during December : The balance sheet reported total assets of $55,650.00 and total stockholders' equity of $38,000.00. What is the amount of profit or loss during December
Compute estimate of the ending balance of account receivable : Determine and Compute an estimate of the ending balance of accounts receivable from customers that should appear in the ledger and any apparent shortages
BIT 100 Introduction To Programming Assignment : BIT 100 Introduction To Programming Assignment Help and Solution, HELP University - Assessment Writing Service - Explain the steps involved in program
What is the after-tax income : In late December, he performed $33,000 of legal services for a client. What is the after-tax income if Hank sends his client the bill in January
Prepare the entry to record the exchange : Record annual depletion for the first year, ended August 31, 2017. (Credit account titles are automatically indented when the amount is entered
What is Heather Taxable income and Income tax : For the year, Heather is employed and has wages of $81,400. What is Heather's Taxable income and Income tax is she files single
What are sandi co total non-current assets : If during 20x3, $20160 dividends were paid by the corporation and no net income was earned, what is the 20x3 opening retained earnings amount?
Set up balance sheet on December : Accounts Receivable $39900. Set up balance sheet on December 31. Hint: You will need to determine the net book value for equipment and buildings

Reviews

Write a Review

Financial Accounting Questions & Answers

  Compute the return on common stockholders equity ratios

Compute the following ratios for 2014. (Weighted-average common shares in 2014 were 60,000.) Earnings per share and Return on common stockholders' equity.

  Compute maximum deductions that dan can claim with respect

On May 5, 2013, Dan purchased and placed in service a 7-year class asset costing $720,000. Compute the maximum deductions that Dan can claim with respect to this asset in 2013 and 2014.

  Ending inventory using the conventional retail method

Boyne Inc. had beginning inventory of $15,800 at cost and $28,600 at retail. Net purchases were $117,119 at cost and $178,900 at retail. Net markups were $10,400; net markdowns were $8,700; and sales revenue was $147,600.  Ending inventory using the ..

  Prepare journal entry to record the exercise

Prepare a Lease Amortization schedule for the entire lease. Prepare the journal entry to record the exercise of the Bargain Purchase Option at the end of the lease term.

  What was the cost of construction actually incurred

In 2016, Long Construction Corporation began construction work under a three-year contract. The contract price is $2,100,000. Long recognizes revenue over time according to percentage of completion for financial reporting purposes. What was the cost ..

  Calculate the amounts for deferred tax assets

Prepare a deferred tax worksheet to calculate the amounts for deferred tax assets and deferred tax liabilities for the reporting period 30 June 2018

  Details on legislated payments on termination of employment

Provide the details on all legislated payments on termination of employment required for each jurisdiction.-  In addition to the required payments on termination, include any employer costs related to the employees' statutory deductions.

  Describe the role religion played in the political system

Describe the role religion played in the political system of the two cultures you have chosen. When responding to classmates, provide additional

  Calculate internal rate of return on the diagnostic machine

General Hospital is planning to add a new diagnostic machine which should improve its quality of certain blood tests. The machine under consideration has a cost of $61,044 and is expected to save the hospital $7,610 each year. The machine has an expe..

  Sales dollars is required

What is the margin of safety in sales dollars-What amount of sales dollars is required to earn an annual profit.

  Analyzing and interpreting pension disclosure

Analyzing and Interpreting Pension Disclosure-Expenses and Returns Stanley Black & Decker, INC. discloses the following pension footnote in its 10-K report. Explain, in general, how expected return on plan assets affects reported pension expense. How..

  Simon lost 5000 betting this year on a trip to las vegas in

simon lost 5000 betting this year on a trip to las vegas. in addition he paid 2000 to his broker for managing his

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd