Financial Accounting



STATEMENT OF COMPREHENSIVE INCOME &TAXES3

TAX CALCULATIONS7

COMPREHENSIVE STATEMENT OF FINANCIAL ANALYSIS12

COMPREHENSIVE STATEMENT OF RATIO ANALYSIS14

COMPREHENSIVE STATEMENT OF FINANCIAL POSITION20

References26

Managerial Finance

STATEMENT OF COMPREHENSIVE INCOME &TAXES

Q No # P2-1

Income before taxes

92,500

Part A

Tax calculation

Base tax + (Marginal rate × amount over Base bracket)

Base Tax

13,750

Marginal rate

34%

Base bracket amount

75,000

Amount over base bracket

17,500

Marginal tax amount

5,950

Total tax liability

19,700

Part B

Income before taxes

92,500

Total tax liability

19,700

Income after tax

72,800

Part C

Total tax liability

19,700

Total taxable income

92,500

Average tax rate

21%

Part D

Marginal tax rate

34%

Q No # P2-2 (A)

Income before taxes

10,000

Part A

Tax calculation

Base tax + (Marginal rate × amount over base bracket)

Base Tax

-

Marginal rate

15%

Base bracket amount

-

Amount over base bracket

10,000

Marginal tax amount

1,500

Total tax liability

1,500

Part B

Income before taxes

10,000

Total tax liability

1,500

Income after tax

8,500

Part C

Total tax liability

1,500

Total taxable income

10,000

Average tax rate

15%

Q No # P2-2 (A)

Income before taxes

80,000

Part A

Tax calculation

Base tax + (Marginal rate × amount over base bracket)

Base Tax

13,750

Marginal rate

34%

Base bracket amount

75,000

Amount over base bracket

5,000

Marginal tax amount

1,700

Total tax liability

15,450

Part B

Income before taxes

80,000

Total tax liability

15,450

Income after tax

64,550

Part C

Total tax liability

15,450

Total taxable income

80,000

Average tax rate

19%

Q No # P2-2 (A)

Income before taxes

300,000

Part A

Tax calculation

Base tax + (Marginal rate × amount over base bracket)

Base Tax

22,250

Marginal rate

39%

Base bracket amount

100,000

Amount over base bracket

200,000

Marginal tax amount

78,000

Total tax liability

100,250

Part B

Income before taxes

300,000

Total tax liability

100,250

Income after tax

199,750

Part C

Total tax liability

100,250

Total taxable income

300,000

Average tax rate

33%

Q No # P2-2 (A)

Income before taxes

500,000

Part A

Tax calculation

Base tax + (Marginal rate × amount over base bracket)

Base Tax

113,900

Marginal rate

34%

Base bracket amount

335,000

Amount over base bracket

165,000

Marginal tax amount

56,100

Total tax liability

170,000

Part B

Income before taxes

500,000

Total tax liability

170,000

Income after tax

330,000

Part C

Total tax liability

170,000

Total taxable income

500,000

Average tax rate

34%

Q No # P2-2 (A)

Income before taxes

1,500,000

Part A

Tax calculation

Base tax + (Marginal rate × amount over base bracket)

Base Tax

113,900

Marginal rate

34%

Base bracket amount

335,000

Amount over base bracket

1,165,000

Marginal tax amount

396,100

Total tax liability

510,000

Part B

Income before taxes

1,500,000

Total tax liability

510,000

Income after tax

990,000

Part C

Total tax liability

510,000

Total taxable income

1,500,000

Average tax rate

34%

Q No # P2-2 (A)

Income before taxes

10,000,000

Part A

Tax calculation

Base tax + (Marginal rate × amount over base bracket)

Base Tax

113,900

Marginal rate

34%

Base bracket amount

335,000

Amount over base bracket

9,665,000

Marginal tax amount

3,286,100

Total tax liability

3,400,000

Part B

Income before taxes

10,000,000

Total tax liability

3,400,000

Income after tax

6,600,000

Part C

Total tax liability

3,400,000

Total taxable income

10,000,000

Average tax rate

34%

Q No # P2-2 (A)

Income before taxes

20,000,000

Part A

Tax calculation

Base tax + (Marginal rate × amount over base bracket)

Base Tax

6,416,667

Marginal rate

35%

Base bracket amount

18,333,333

Amount over base bracket

1,666,667

Marginal tax amount

583,333

Total tax liability

7,000,000

Part B

Income before taxes

20,000,000

Total tax liability

7,000,000

Income after tax

13,000,000

Part C

Total tax liability

7,000,000

Total taxable income

20,000,000

Average tax rate

35%

TAX CALCULATIONS

Q No # P2-2 (B)

Average tax rates

Pretax income (Amount in 000)

15%

10

19%

80

33%

300

34%

500

34%

1,500

34%

10,000

35%

20,000

Q No # P2-3 (A)

Income before taxes

15,000

Part A

Tax calculation

Base tax + (Marginal rate × amount over base bracket)

Base Tax

-

Marginal rate

15%

Base bracket amount

-

Amount over base bracket

15,000

Marginal tax amount

2,250

Total tax liability

2,250

Q No # P2-3 (A)

Income before taxes

60,000

Part A

Tax calculation

Base tax + (Marginal rate × amount over base bracket)

Base Tax

7,500

Marginal rate

25%

Base bracket amount

50,000

Amount over base bracket

10,000

Marginal tax amount

2,500

Total tax liability

10,000

Q No # P2-3 (A)

Income before taxes

90,000

Part A

Tax calculation

Base tax + (Marginal rate × amount over base bracket)

Base Tax

13,750

Marginal rate

34%

Base bracket amount

75,000

Amount over base bracket

15,000

Marginal tax amount

5,100

Total tax liability

18,850

Q No # P2-3 (A)

Income before taxes

200,000

Part A

Tax calculation

Base tax + (Marginal rate × amount over base bracket)

Base Tax

22,250

Marginal rate

39%

Base ...