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Problem 39_Noventis Corporation prepared the following estimates

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Question;Segment interim reporting;Problem 39;Noventis Corporation prepared the;following estimates for the four quarters of the current year;First Qt;Second QT;Third qt;Fourth QT;Sales;10,00,000.00;12,00,000.00;14,00,000.00;16,00,000.00;COGS;4,00,000.00;4,80,000.00;5,50,000.00;6,00,000.00;Admisnitrative costs;2,50,000.00;1,55,000.00;1,60,000.00;1,70,000.00;Advertising cost;-;1,00,000.00;-;-;executive bonuses;-;-;80,000.00;Provision for bad debts;-;-;52,000.00;Annual maintenance costs;60,000.00;-;-;Aditional;information;1) First quarter admisnitrative;costs include 100,000 annual insurance premium;2) Advertisement costs paid in the;second quarter relate to television advertisements;that will be broadcast throughout;the entire year.;3) No special items affect income;during the year.;4) Noventis estimates an effective;income tax rate for the year of 40%;a) Assuming that actual results do;not vary from the estimates provided, determine;the amount of income to be reported;each quarter of the current year.;b) Assume that actual results do not;vary from the estimates provided except for that in the third;quarter, the estimated annual;effective income tax rate is revised downward to 38%.;Determine the amount of income to be;reported each quarter of the current year.

 

Paper#44610 | Written in 18-Jul-2015

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