The Following Data Are for the Grass Is Greener Company

question 98

Essay

The following data are for the Grass is Greener Company at the end of 2017,after adjustments,except for the calculation of income tax expense.
$\begin{array}{c}\begin{array}{|l|}\hline \text {Accounts payable } \\\hline \text { Property and equipment } \\\hline \text { Cost of service expense } \\\hline \text { Supplies } \\\hline \text { Service revenue } \\\hline \text {Bonds payable } \\\hline \text { Interest receivable } \\\hline \text {Retained earnings } \\\hline \text { Notes payable} \\\hline \text { Investments } \\\hline \text { Accumulated depreciation } \\\hline \text { Supplies expense } \\\hline \end{array}\begin{array}{r|}\hline\$ 281,700 \\ \hline 672,500 \\\hline 183,600 \\\hline 216,900 \\\hline 904,000 \\\hline 229,600 \\\hline 4,300 \\\hline 187,400 \\\hline 356,040 \\\hline 146,400 \\\hline 128,900\\\hline336,200\\\hline\end{array}\begin{array}{l|}\hline \text { Prepaid insurance } \\\hline \text { Contributed capital } \\\hline \text { Other revenue } \\\hline \text {Deferred revenue } \\\hline \text { Depreciation expense} \\\hline \text {Accounts receivable } \\\hline \text { Rent expense } \\\hline \text { Cash} \\\hline \text { Accrued liabilities} \\\hline \text { Prepaid rent} \\\hline \text { Administrative and general expense (includes interest, utilities, etc.) } \\\hline \text { Income tax payable } \\\hline \end{array}\begin{array}{|r|}\hline \$ 6,800 \\\hline 380,600 \\\hline 114,100 \\\hline 83,600 \\\hline 57,750 \\\hline 607,550 \\\hline 30,500 \\\hline 351,340 \\\hline 23,400 \\\hline 11,200 \\\hline 64,300 \\\hline 0\\\hline\end{array}\end{array}$

Required:
A)Calculate the income before income tax.
B)Calculate the income tax owed by the company if its tax rate is 40%.
C)Calculate the net income.
D)Prepare an adjusted trial balance.
E)Prepare an income statement.

• A)Calculate the income before income tax.
• B)Calculate the income tax owed by the company if its tax rate is 40%.
• C)Calculate the net income.
• D)Prepare an adjusted trial balance.
• E)Prepare an income statement.

Understand the relationship between a firm's capital structure and its weighted average cost of capital (WACC).

Distinguish between various states of insolvency and their implications for firms.

Assess the implications of financial leverage on a firm's business risk and financial risk.

Identify the processes involved in liquidating a corporation and the associated legal frameworks.

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Definitions:

Accrued Interest

The interest that has accumulated over a period but has not yet been paid or received.

Maturity Date

The specified date when a financial instrument such as a bond, loan, or fixed deposit is due to be repaid.

Parent Company

A corporation that owns more than 50% of the voting stock of another company, giving it control of the subsidiary's operations and strategic direction.

Voting Stock

Shares that give the shareholder the right to vote on company matters, such as electing the board of directors.