 # Homework 2

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4361 Words Grammar Plagiarism  Writing  Score Homework 2 1. Construct a balance sheet for Sophie’s Sofas given the following data. (Be sure to list the assets andliabilities in order of their liquidity.) | Cash balances | = | \$ | 8,000 | Inventory of sofas | = | \$ | 180,000 | Store and property | = | \$ | 80,000 | Accounts receivable | = | \$ | 20,000 | Accounts payable | = | \$ | 15,000 | Long-term debt | = | \$ | 150,000 | | BALANCE SHEET OF SOPHIE’S SOFAS | Assets | | Liabilities & Shareholders’ Equity | | Cash | \$ | Accounts payable | \$ | Accounts receivable | | Long-term debt | | Inventory | | Shareholders’ equity | | Store & property | | | | | | | | Total assets | \$ | Total liabilities & Shareholders' equity | \$ | |
Top of Form 2. Using Table 3.7, calculate the marginal and average tax rates for a single taxpayer with the following incomes: (Do notround intermediate calculations. Round "Average tax rate" to 2 decimal places.) | | Income | Marginal Tax Rate | Average Tax Rate | a. | \$21,000 | % | % | b. | \$51,000 | % | % | c. | \$304,000 | % | % | d. | \$3,200,000 | % | % | |
Explanation:
a. | Taxes = (0.10 × \$8,500) + 0.15 × (\$21,000 − \$8,500) = \$2,725 | Marginal tax rate = 15% | Average tax rate = \$2,725/\$21,000 = 0.12976 = 12.98% | | b. | Taxes = (0.10 × \$8,500) + 0.15 × (\$34,500 − \$8,500) + 0.25 × (\$51,000 − \$34,500) = \$8,875 | Marginal tax rate = 25% | Average tax rate = \$8,875/\$51,000 = 0.17402 = 17.40% | | c. | Taxes = (0.10 × \$8,500) + 0.15 × (\$34,500 − \$8,500) + 0.25 × (\$83,600 − \$34,500) + 0.28 × (\$174,400 − \$83,600) + 0.33 × (\$304,000 − \$174,400) = \$85,217 | Marginal tax rate = 33% | Average tax rate = \$85,217/\$304,000 = 0.280319 = 28.03% | | d. | Taxes = (0.10 × \$8,500) + 0.15 × (\$34,500 − \$8,500) + 0.25 × (\$83,600 − \$34,500) + 0.28 × (\$174,400 − \$83,600) + 0.33 × (\$379,150 − \$174,400) + 0.35 × (\$3,200,000 − \$379,150) = \$1,097,314.0 | Marginal tax rate = 35% | Average

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