Author: angela bedfrd


Construct a balance sheet for Sophie’s Sofas given the following data.
A firm’s income statement included the following data. The firm’s average tax rate was 20%.
The year-end 2013 balance sheet of Brandex Inc. listed common stock and other paid-in capital at $2,200,000 and retained earnings at $4,500,000. The next year, retained earnings were listed at $4,800,000. The firm’s net income in 2014 was $1,010,000. There were no stock repurchases during the year. What were the dividends paid by the firm in 2014?
South Sea Baubles has the following (incomplete) balance sheet and income statement.
The founder of Alchemy Products, Inc., discovered a way to turn lead into gold and patented this new technology. He then formed a corporation and invested $400,000 in setting up a production plant. He believes that he could sell his patent for $24 million.
Butterfly Tractors had $23.00 million in sales last year. Cost of goods sold was $9.80 million, depreciation expense was $3.80 million, interest payment on outstanding debt was $2.80 million, and the firm’s tax rate was 35%
Sheryl’s Shipping had sales last year of $11,000. The cost of goods sold was $6,700, general and administrative expenses were $1,200, interest expenses were $700, and depreciation was $1,200. The firm’s tax rate is 40%.
During the last year of operations, Theta’s accounts receivable increased by $13,000, accounts payable increased by $6,500, and inventories decreased by $2,600. What is the total impact of these changes on the difference between profits and cash flow?
The following table shows an abbreviated income statement and balance sheet for McDonald's Corporation for 2012
What would be the marginal and average tax rates for a married couple with taxable income of $91,900? For an unmarried taxpayer with the same income? Use Table 3.7. 

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