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1.
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Life insurance expense on officers was $9,000. |
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2.
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Equipment was acquired in early January for $300,000. Straight-line depreciation over a 5-year life is used, with no salvage value. For tax purposes, Shinault used a 30% rate to calculate depreciation. |
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3.
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Interest revenue on State of New York bonds totaled $4,000. |
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4.
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Product warranties were estimated to be $50,000 in 2014. Actual repair and labor costs related to the warranties in 2014 were $10,000. The remainder is estimated to be paid evenly in 2015 and 2016. |
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5.
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Gross profit on an accrual basis was $100,000. For tax purposes, $75,000 was recorded on the installment-sales method. |
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6.
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Fines incurred for pollution violations were $4,200. |
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7.
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Pretax financial income was $750,000. The tax rate is 30%. |
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