South Carolina Corporation has one temporary difference at the end of 2008 that will reverse and cause taxable amounts

E19-1 (One Temporary difference, Future Taxable Amounts, One Rate, No Beginning Deferred Taxes) South Carolina Corporation has one temporary difference at the end of 2008 that will reverse and cause taxable amounts of  $55,000 in 2009, $60,000 in 2010, and $65,000 in 2011. South Carolina's pretax financial income for 2008 is $300,000 and the tax rate us 30% for all years. There are no deferred taxes at the beginning of 2008.

Instructions
a.) Compute taxable income and income taxes payable for 20008.
b.) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2008.
c.) Prepare the income tax expense section of the income statement for 2008, beginning with the line "Income before income taxes"

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Fraser Company will need a new warehouse in five years

Fraser Company will need a new warehouse in five years. The warehouse will cost $500,000 to build.

Required:
What lump-sum amount should the company invest now to have the $500,000 available at the end of the five-year period? Assume that the company can invest money at:

1. Ten percent.
2. Fourteen percent.


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Margaret started her own business in the current year and will report a profit for her first year

Margaret started her own business in the current year and will report a profit for her first year. Her results of operations are as follows:

Gross income $50,000
Travel 1,000
Transportation 6,173 miles, using standard mileage method
Entertainment in" total 4,000
Seven gifts at $50 each 350
Rent and utilities for apartment in total 10,000
(20% is used for a home office)

What is the net income Margaret should show on her Schedule C? Show the calculation of her taxable business income.


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The treasurer anticipates the following costs for the event, which will be held at the Regency Hotel

The treasurer anticipates the following costs for the event, which will be held at the Regency Hotel:

Room rental $300
Dinner cost (per person) 25
Chartered buses 500
Favors and souvenirs (per person) 5
Band 900

Each person would pay $40 to attend; 200 attendees are expected.

a. Will the event be profitable for the sorority? Show computations.
b. How many people must attend for the sorority to break even?
c. Suppose the sorority encouraged its members to drive to the hotel and did not charter the buses. Further, a planned menu change will reduce the cost per meal by $2. If each member will still be charged $40, compute the contribution margin per person.

Click here for the solution: The treasurer anticipates the following costs for the event, which will be held at the Regency Hotel