ZuoTi.Pro
Question

XYZ Company, a 'for-profit' business, had revenues of $15 million in 2018. Expenses other than depreciation...

XYZ Company, a 'for-profit' business, had revenues of $15 million in 2018. Expenses other than depreciation totaled 75 percent of revenues. XYZ Company, must pay taxes at a rate of 40 percent of pretax (operating) income. All revenues were collected in cash during the year, and all expenses other than depreciation were paid in cash.  

Depreciation originally was $1.3 million; however, a change in the depreciation schedule (still within GAAP) has now made the depreciation expense DOUBLE.  

Based on this change in depreciation expense, what would XYZ's net income now be?

Select one or more:

a. $1,000,000

b. $500,000

c. $690,000

d. $1,350,000

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Solution-

Revenue = $15,000,000

Expenses ( other than depreciation) = $15000,000*75%= $1,12,50,000

Depreciation = $13,00,000*2= $26,00,000 (depreciation increase from $1.3 million to $2.6 million

Tax rate =40%

Net income =?

Based on change in depreciation expense , statement showing net income :-

Particulars

Amount $
Revenue 150,00,000
Less: Expenses ( other than depreciation) 112,50,000
Less : Depreciation

26,00,000
Income before taxes 11,50,000
Less: taxes @40% 4,60,000
Net income 6,90,000
Option C is correct $ 6,90,000

Based on change in depreciation expense XYZ's net income would be $6,90,000

0 0
Add a comment
Know the answer?
Add Answer to:
XYZ Company, a 'for-profit' business, had revenues of $15 million in 2018. Expenses other than depreciation...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • XYZ Company, a 'for-profit' business, had revenues of $15 million in 2018. Expenses other than depreciation...

    XYZ Company, a 'for-profit' business, had revenues of $15 million in 2018. Expenses other than depreciation totaled 75 percent of revenues. XYZ Company, must pay taxes at a rate of 40 percent of pretax (operating) income. All revenues were collected in cash during the year, and all expenses other than depreciation were paid in cash.   Depreciation originally was $1.5 million; however, now the company has decided to be more conservative in its depreciation of its capital assets. XYZ now has...

  • XYZ Company, a 'for-profit' business, had revenues of $15 million in 2018. Expenses other than depreciation...

    XYZ Company, a 'for-profit' business, had revenues of $15 million in 2018. Expenses other than depreciation totaled 75 percent of revenues. XYZ Company, must pay taxes at a rate of 40 percent of pretax (operating) income. All revenues were collected in cash during the year, and all expenses other than depreciation were paid in cash.   Depreciation originally was $1.5 million; however, now the company has decided to be more conservative in its depreciation of its capital assets. XYZ now has...

  • XYZ Company, a 'for-profit' business, had revenues of $12 million in 2016. Expenses other than depreciation...

    XYZ Company, a 'for-profit' business, had revenues of $12 million in 2016. Expenses other than depreciation totaled 75 percent of revenues. XYZ Company, must pay taxes at a rate of 40 percent of pretax (operating) income. All revenues were collected in cash during the year, and all expenses other than depreciation were paid in cash. Depreciation originally was $1.5 million; however, now the company has decided to be more conservative in its depreciation of its capital assets. XYZ now has...

  • Question text XYZ Company, a 'for-profit' business, had revenues of $15 million in 2018. Expenses other...

    Question text XYZ Company, a 'for-profit' business, had revenues of $15 million in 2018. Expenses other than depreciation totaled 75 percent of revenues, and depreciation expense was $1.3 million. XYZ Company, must pay taxes at a rate of 40 percent of pretax (operating) income. All revenues were collected in cash during the year, and all expenses other than depreciation were paid in cash.   What was XYZ's total cash flow? Hint: Look at the PowerPoint, Homework Hint, especially as it relates...

  • show all work. not through excel please 11.5 Brandywine Clinic, a not-for-profit business, had revenues of...

    show all work. not through excel please 11.5 Brandywine Clinic, a not-for-profit business, had revenues of $12 million in 2016. Expenses other than depreciation totaled 75 percent of revenues, and depreciation expense was $1.5 million. All revenues were collected in cash during the year, and all expenses other than depreciation were paid in cash. Construct Brandywine's 2016 income statement. b. What were Brandywine's net income, total profit margin, and cash flow? a. Now, suppose the company changed its depreciation calculation...

  • Brookline Specialty Hospital, a not-for-profit provider, had revenues of $12 million in 2018. Expenses other than...

    Brookline Specialty Hospital, a not-for-profit provider, had revenues of $12 million in 2018. Expenses other than depreciation totaled 75% of revenues. Brookline purchased fixed assets for $50 million in 2010 and expects to sell these assets for $20 million at the end of their 20-year lifetime. a. Calculate Brookline’s annual depreciation expense. b. Construct Brookline’s income statement for Year Ended December 31, 2018. c. Calculate Brookline’s net income, total profit margin, and approximate cash flow. In one sentence, provide an...

  • Miami Children's Hospital reported net income for 2018 0f $9,700,120 on total revenues of $121,251,500. Depreciation...

    Miami Children's Hospital reported net income for 2018 0f $9,700,120 on total revenues of $121,251,500. Depreciation expense totaled $4,041,717. Assume that all expenses, except depreciation, were cash expenses. a. Assume the hospital is a not-for-profit corporation for parts a - c. What were total operating expenses for 2018? b. What were total cash expenses for 2018? c. What was the hospital’s 2018 cash flow? d. Now, suppose the company changed its depreciation method (still within GAAP) such that its depreciation...

  • Henson Pharmaceuticals reported net income for 2018 of $4.8 million on total revenues of $44 million....

    Henson Pharmaceuticals reported net income for 2018 of $4.8 million on total revenues of $44 million. Depreciation expense totaled $930,000.   What were total cash expenses for 2018? Assume that depreciation is a non-cash expense.

  • The Berndt Corporation expects to have sales of $10 million. Costs other than depreciation are expected...

    The Berndt Corporation expects to have sales of $10 million. Costs other than depreciation are expected to be 80% of sales, and depreciation is expected to be $1 million. All sales revenues will be collected in cash, and costs other than depreciation must be paid for during the year. Brendt's federal-plus-state tax rate is 35%. Berndt has no debt. Set up an income statement. What is Berndt's expected net cash flow? Enter your answer in dollars. For example, an answer...

  • The Berndt Corporation expects to have sales of $10 million. Costs other than depreciation are expected...

    The Berndt Corporation expects to have sales of $10 million. Costs other than depreciation are expected to be 80% of sales, and depreciation is expected to be $1 million. All sales revenues will be collected in cash, and costs other than depreciation must be paid for during the year. Brendt's federal-plus-state tax rate is 35%. Berndt has no debt. Set up an income statement. What is Berndt's expected net cash flow? Enter your answer in dollars. For example, an answer...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT