Lion Corporation is concerned about a potential accumulated earnings tax liability. It accumulates E&P for working...
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Lion Corporation is concerned about a potential accumulated earnings tax liability. It accumulates E&P for working capital necessary to conduct its manufacturing business. The following data appear in its current year balance sheets. (Click the icon to view the balance sheet data.) Requirements a. What is Lion's operating cycle in days? As a decimal? b. What is Lion's reasonable working capital amount as determined under the Bardahl formula? c. What steps must Lion take to justify accumulating earnings that exceed the amount prescribed under the Bardahl formula? Print Done Data Table (Click the icon to view the incor Read the requirements. Sales Cost of goods sold Purchases Operating expenses (other than cost of goods sold) Print Included in operating expenses are depreciation of $150,000 and federal income taxes of $100,000 (assume paid at one time rath than in installments). Done I $ 3,200,000 1,500,000 1,200,000 1,000,000 Data Table Sales Cost of goods sold Purchases Operating expenses (other than cost of goods sold) Included in operating expenses are depreciation of $150,000 and federal income taxes of $100,000 (assume paid at one time rather than in installments). Print Done - $ 3,200,000 1,500,000 1,200,000 1,000,000 X Data Table 4 Account Accounts receivable $ Inventory Accounts payable LA Beginning Balance 300,000 $ 240,000 150,000 Print Done Ending Balance - Peak Balance for the Year 400,000 $ 300,000 200,000 400,000 375,000 220,000 X Lion Corporation is concerned about a potential accumulated earnings tax liability. It accumulates E&P for working capital necessary to conduct its manufacturing business. The following data appear in its current year balance sheets. (Click the icon to view the balance sheet data.) Requirements a. What is Lion's operating cycle in days? As a decimal? b. What is Lion's reasonable working capital amount as determined under the Bardahl formula? c. What steps must Lion take to justify accumulating earnings that exceed the amount prescribed under the Bardahl formula? Print Done Data Table (Click the icon to view the incor Read the requirements. Sales Cost of goods sold Purchases Operating expenses (other than cost of goods sold) Print Included in operating expenses are depreciation of $150,000 and federal income taxes of $100,000 (assume paid at one time rath than in installments). Done I $ 3,200,000 1,500,000 1,200,000 1,000,000 Data Table Sales Cost of goods sold Purchases Operating expenses (other than cost of goods sold) Included in operating expenses are depreciation of $150,000 and federal income taxes of $100,000 (assume paid at one time rather than in installments). Print Done - $ 3,200,000 1,500,000 1,200,000 1,000,000 X Data Table 4 Account Accounts receivable $ Inventory Accounts payable LA Beginning Balance 300,000 $ 240,000 150,000 Print Done Ending Balance - Peak Balance for the Year 400,000 $ 300,000 200,000 400,000 375,000 220,000 X
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Related Book For
Federal Taxation 2016 Comprehensive
ISBN: 9780134104379
29th Edition
Authors: Thomas R. Pope, Timothy J. Rupert, Kenneth E. Anderson
Posted Date:
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