Denver Company, a calendar year corporation, had the following actual income before income tax expense and estimated effective annual income tax rates for the first two quarters in year x8: quarter income before tax estimated tax rate first $100k 30% second $140k 24% Denver's income tax expense in its interim income statement for the second quarter should be:

Denver Company

Income Tax Expense for the second quarter:

Pre-tax quarter income = $140,000

Estimated tax rate = 24%

Tax Expense = $140,000 x 24%

= $33,600

Explanation:

a) Data:

Quarter    income before tax        estimated tax rate

first                 $100k                          30%

second           $140k                          24%

b) Denver's quarter second income tax expense is the product of the pretax income for the second quarter and the estimated income tax rate for the quarter.  The resulting calculation shows the estimated income tax expense that has to be settled by Denver.  If it is not settled in the quarter second period, it has to be carried forward to the next quarter as a liability under the heading, Income Tax Payable.

d. to get countries or companies to stop doing something objectionable.

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.