Chapter 2 Textbook Homework

Duela Dent is single and had $178,400 in taxable income. Use the rates from Table 2.3. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Calculate her income taxes.

(reference 2018 Personal Tax Rates table) Step 1) .10(9,525) = 952.50 .12(38,700 - 9,525) = 3,501 .22(82,500 - 38,700) = 9,636 .24(157,500 - 82,500) = 18,000 .32(178,400 - 157,500) = $6,688 Step 2) 952.50 + 3,501 + 9,636 + 18,000 + 6,688 = $38,777.50

Benson, Inc., has sales of $42,030, costs of $13,650, depreciation expense of $2,950, and interest expense of $2,150. The tax rate is 25 percent. What is the operating cash flow, or OCF? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

1) 42,030 - 13,650 - 2,950 = 25, 430 (EBIT) 2) 25,430 - 2,150 = 23,280 3) 23,280 * .25 = 5,820 4) 23,280 - 5,820 = 17,460 Operating Cash Flow = EBIT + Depreciation - Tax a. 25,430+ 2,950 - 5,820 = $22,560

Sidewinder, Inc., has sales of $638,000, costs of $329,000, depreciation expense of $74,000, interest expense of $39,000, and a tax rate of 21 percent. What is the net income for this firm? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

1) 638,000 - 329,000 - 74,000 = 235,000 2) 235,000 - 39,000 = 196,000 3) 196,000 * .21 = 41,160 4) 196,000 - 41,160 = $154,840

Sidewinder, Inc., has sales of $674,000, costs of $338,000, depreciation expense of $83,000, interest expense of $48,000, and a tax rate of 25 percent. The firm paid out $78,000 in cash dividends. What is the addition to retained earnings? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

1) 674,000 - 338,000 - 83,000 = 253,000 2) 253,000 - 48,000 = 205,000 3) 205,000 * .25 = 51,250 4) 205,000 - 51,250 = 153,750 5) 153,750 - 78,000 = $75,750

Sidewinder, Inc., has sales of $686,000, costs of $341,000, depreciation expense of $86,000, interest expense of $51,000, and a tax rate of 23 percent. The firm paid out $81,000 in cash dividends and has 37,600 shares of common stock outstanding. a. What is the earnings per share, or EPS, figure? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the dividends per share figure? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

1) 686,000 - 341,000 - 86,000 = 259,000 2) 259,000 - 51,000 = 208,000 3) 208,000 * .23 = 47,840 4) 208,000 - 47,840 = 160,160 Earnings per share = NI / total shares outstanding a. 160,160 / 37,600 = $4.26 Dividends per share = total dividends / total shares outstanding b. 81,000 / 37,600 = $2.15

Grey Wolf, Inc., has current assets of $2,270, net fixed assets of $10,300, current liabilities of $1,400, and long-term debt of $4,080. a. What is the value of the shareholders' equity account for this firm? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. How much is the company's net working capital? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

a. $7,090 - Shareholder's Equity = Total Value of Assets (Current & Fixed) - Total Value of Liabilities (Current & Long-Term) b. $870 - NWC = Current Assets - Current Liabilities

Duela Dent is single and had $185,600 in taxable income. Use the rates from Table 2.3. a. What is the average tax rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the marginal tax rate? (Enter your answer as a percent rounded to the nearest whole number, e.g., 32.)

Step 1) .10(9,525) = 952.50 .12(38,700 - 9,525) = 3,501 .22(82,500 - 38,700) = 9,636 .24(157,500 - 82,500) = 18,000 .32(185,600 - 157,500) = $8,992 Step 2) 952.50 + 3,501 + 9,636 + 18,000 + 8,992 = $41,081.50 a. 41,081.50 / 185,600 = .2213 .2213 * 100 = 22.13% b. 32% (based on 2018 Personal Tax Rates table)