Question 1:
Score 0/1
Your response
Correct response
Building an Income Statement
Fyre, Inc., has sales of $580,000, costs of $270,000, depreciation expense of $78,000, interest expense of $48,000,
and a tax rate of 36 percent. The net income for this firm is $
245200
(0%).
(Omit the "$" sign in your
response.)
Building an Income Statement
Fyre, Inc., has sales of $580,000, costs of $270,000, depreciation expense of $78,000, interest expense
and a tax rate of 36 percent. The net income for this firm is $
117,760 with a tolerance of ± 0
the "$" sign in your response.)
Total grade:
0.0×1/1 = 0%
Feedback:
The income statement starts with revenues and subtracts costs to arrive at EBIT. We then subtract out interest to
get taxable income, and then subtract taxes to arrive at net income. Doing so, we get:
Income Statement
Sales
$ 580,000
Costs
270,000
Depreciation
78,000
EBIT
$ 232,000
Interest
48,000
Taxable income
$ 184,000
Taxes
66,240
Net income
$117,760
Question 2:
Score 0/1
Your response
Correct response
Market Values and Book Values
Klingon Widgets, Inc., purchased new cloaking machinery three years ago for $3 million. The machinery can be sold
to the Romulans today for $1.6 million. Klingon's current balance sheet shows net fixed assets of $2 million, current
liabilities of $1,000,000, and net working capital of $510,000. If all the current assets were liquidated today, the
company would receive $1.3 million cash.
(Enter answers in dollars, not millions of dollars. Omit the "$" sign
in your response.)
The book value of Klingon's assets today is $
1510000
(0%) and the market value is $
1300000
(0%).
Market Values and Book Values
Klingon Widgets, Inc., purchased new cloaking machinery three years ago for $3 million. The machinery
to the Romulans today for $1.6 million. Klingon's current balance sheet shows net fixed assets of $2 mil
liabilities of $1,000,000, and net working capital of $510,000. If all the current assets were liquidated
company would receive $1.3 million cash.
(Enter answers in dollars, not millions of dollars. Omit th
in your response.)
The book value of Klingon's assets today is $
3,510,000
and the market value is $
2,900,000
.
Total grade:
0.0×1/2 + 0.0×1/2 = 0% + 0%
Feedback:
To find the book value of assets, we first need to find the book value of current assets. We are given the NWC. NWC
is the difference between current assets and current liabilities, so we can use this relationship to find the book value of
current assets. Doing so, we find:
NWC = Current assets  Current liabilities
Current assets = $510,000 + 1,000,000 = $1,510,000
Now we can construct the book value of assets. Doing so, we get:
Book value of assets
Current assets
$ 1,510,000
Fixed assets
2,000,000
Total assets
$ 3,510,000
All of the information necessary to calculate the market value of assets is given, so:
Market value of assets
Current assets
$ 1,300,000
Fixed assets
1,600,000
Total assets
$ 2,900,000
Question 3:
Score 1/1
Your response
Correct response
Calculating Taxes
The Fly Leaf Co. had $313,000 in taxable income. Using the rates from the table below, the company's income
taxes are $
105320
(100%).
(Omit the "$" sign in your response.)
Taxable Income
Tax Rate
$0

5
0
,
0
0
0
1
5
%
50,001 
75,000
25
75,001 
100,000
34
100,001 
335,000
39
335,001 
10,000,000
10,000,001 
15,000,000
35
15,000,001 
18,333,333
38
18,333,334 +
Calculating Taxes
The Fly Leaf Co. had $313,000 in taxable income. Using the rates from the table below, the compan
taxes are $
105320
.
(Omit the "$" sign in your response.)
Taxable Income