Plaxo Corporation has a tax rate of 35% and uses the straight-line method of depreciation for its equipment, which has a useful life of four years. Tax legislation requires the company to depreciate its equipment using the following schedule: year 1- 50%, year 2 – 30%, year 3 – 15% and year 4 – 5%. On January 1, Year 1 Plaxo purchases a piece of equipment with a four year life and an original cost of $100,000. What amount will Plaxo record as a deferred tax asset or liability on the December 31, Year 1 balance sheet?

All of the following are firms that may experience a long lag between the expenditures of cash and the receipt of cash from customers, except:  

Present value methods are often used with receivables and liabilities:  

All of the following are reasons that pharmaceutical companies have higher barriers for entry than grocery stores except:  

Return on assets will likely differ across firms and across time. Three elements of risk that will help explain these differences are operating leverage,  and length of product life cycle.

Carl IndustriesCarl Industries has condensed balance sheets as shown: Year 2 Year 1 Year 0 Assets: Current assets 65,000 $46,500 $80,000 Plant & equipment, net 600,000 420,000 410,000 Intangible assets, net 15,000 36,500 50,000 Total assets 680,000 $503,000 540,000 Liabilities & Stockholders’ Equity: Current liabilities $70,000 $25,000 $33,500 Long-term liabilities 420,000 290,000 400,000 Stockholders’ equity 190,000 188,000 106,500 Total liabilities & equity $680,000 $503,000 540,000 Refer to the information for Carl Industries. In a common size balance sheet for Year 0, total liabilities and equity are expressed as:  

When calculating Basic earnings per share net income is adjusted by

 financial statements are helpful in highlighting the relative magnitude of changes in financial statement data from year to year.

Nonmonetary assets include assets that are tangible, such as inventories, and assets that are intangible such as

Accounts payable represent: