CHAPTER 13 2 PLEASE READ this question has 2 parts please an

CHAPTER 13, 2

PLEASE READ: this question has 2 parts, please answer the FULL question, please TYPE your answer, please LABEL your answer.

Chris Inc. has accumulated the following information for its second-quarter income statement for 20X2: Sales Cost of goods sold Operating expenses $852,000 422,000 Additional Information 1. First-quarter income before taxes was $102,000, and the estimated effective annual tax rate was 40 percent. At the end of the second quarter, expected annual income is $760,000, and a dividend exclusion of $46,000 and a business tax credit of $15,000 are anticipated. The combined state and federal tax rate is 50 percent. $12 per unit. However, you have determined that these units are expected to be replaced at a cost of $26 per unit. second quarter will receive about 25 percent of the benefits from this project with the remainder benefiting the third and fourth 2. The $422,000 cost of goods sold is determined by using the LIFO method and includes 7,500 units from the base layer at a cost of 3. The operating expenses of $232,000 include a $62,000 factory rearrangement cost incurred in April. You have determined that the quarters. Required: a. Calculate the effective annual tax rate expected at the end of the second quarter for Chris Inc. Answer is complete and correct. Estimated effective annual tax rate 450%

Solution

Ans 1 Effective interest annual rate 45% ans 2 Income statement For three months ended Sales $852,000 Cost of good sold 527000 Gross profit $325,000 Operating expenses 185500 (232000-62000)+(62000*25%) Income before taxes $139,500 Incometaxes (45%*139500) $62,775 net Income $76,725 ans 3 period Current period Year to date Eff.rate Year to date Less previously provided Reported this period 1 102000 102000 40% 40800 0 40800 2 185500 287500 45% 129375 40800 88575 (185500+102000) (287500*45%) (129375-40800) Dear student provided explanation for the incorrect once. If any doubt please comment