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management of Fred’s how to determine whether a writeoff is
permitted.
3. (TCO D) Edwards Co. includes one coupon in each bag of dog food
it sells. In return for four coupons, customers receive a dog toy that
the company purchases for $1.20 each. Edwards's experience indicates
that 60 percent of the coupons will be redeemed. During 2010, 100,000
bags of dog food were sold, 12,000 toys were purchased, and 40,000
coupons were redeemed. During 2011, 120,000 bags of dog food were
sold, 16,000 toys were purchased, and 60,000 coupons were redeemed.
4. (TCO D) Grider Industries, Inc. issued $6,000,000 of 8% debentures
on May 1, 2010 and received cash totaling $5,323,577. The bonds pay
interest semiannually on May 1 and November 1. The maturity date on
these bonds is November 1, 2018. The firm uses the effective-interest
method of amortizing discounts and premiums. The bonds were sold to
yield an effective-interest rate of 10%.
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ACCT 553 Week 1 Homework
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Chapter 1 (5 pts)
1. Briefly discuss the purpose of the Sixteenth Amendment
Chapter 2 (5 pts)
2. Explain the two "safe harbors" available to an Individual taxpayer
to avoid a penalty for underpayment of estimated tax.