|Segment interim reporting|
|Noventis Corporation prepared the
following estimates for the four quarters of the current year:
|First Qt||Second QT||Third qt||Fourth QT|
|Provision for bad debts||–||–||52,000.00|
|Annual maintenance costs||60,000.00||–||–|
|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.