ZEA Company started operations in 2017.The financial statements of ZEA reflected the following pre-tax amounts for its December 31 year-end:
ZEA has a tax rate of 30% in 2017 and 35% in 2018,enacted in February each year.The unearned rent revenue represents cash received from a tenant that will be moving into the building February 15,2019.For tax purposes,any cash received for future rent is taxed when the cash is received.On July 1,2018 the company was fined $20,000 (included in other operating expenses)for violating a building code,this fine is not tax deductible.ZEA claimed CCA for tax purposes of $600,000 in 2017 and $700,000 in 2018.
Required:
a.Calculate the income tax expense for 2017 and 2018.
b.Calculate the weighted average number of ordinary shares outstanding in each of 2017,and 2018.
c.Calculate the basic EPS for each of 2017,and 2018.

Question

ZEA Company started operations in 2017.The financial statements of ZEA reflected the following pre-tax amounts for its December 31 year-end:
  ZEA has a tax rate of 30% in 2017 and 35% in 2018,enacted in February each year.The unearned rent revenue represents cash received from a tenant that will be moving into the building February 15,2019.For tax purposes,any cash received for future rent is taxed when the cash is received.On July 1,2018 the company was fined $20,000 (included in other operating expenses)for violating a building code,this fine is not tax deductible.ZEA claimed CCA for tax purposes of $600,000 in 2017 and $700,000 in 2018.
Required:
a.Calculate the income tax expense for 2017 and 2018.
b.Calculate the weighted average number of ordinary shares outstanding in each of 2017,and 2018.
c.Calculate the basic EPS for each of 2017,and 2018.

Quizplus · Accepted Answer

The Answer of ZEA Company started operations in 2017.The financial statements of ZEA reflected the following pre-tax amounts for its December 31 year-end:
  ZEA has a tax rate of 30% in 2017 and 35% in 2018,enacted in February each year.The unearned rent revenue represents cash received from a tenant that will be moving into the building February 15,2019.For tax purposes,any cash received for future rent is taxed when the cash is received.On July 1,2018 the company was fined $20,000 (included in other operating expenses)for violating a building code,this fine is not tax deductible.ZEA claimed CCA for tax purposes of $600,000 in 2017 and $700,000 in 2018.
Required:
a.Calculate the income tax expense for 2017 and 2018.
b.Calculate the weighted average number of ordinary shares outstanding in each of 2017,and 2018.
c.Calculate the basic EPS for each of 2017,and 2018.

ZEA Company Started Operations in 2017