According to the Internal Revenue Code Sec. 61(a), gross income includes “all income from whatever source derived” unless specifically exempted by law. Under this code, the $300,000 is considered gross income since this is income earned by performing services as a part of John’s trade. b. How is the $25,000 treated for purposes of federal tax income?
c. Suppose government imposes a tax equal to the marginal external cost. What is the equilibrium price paid by consumers and the equilibrium quantity after implementation of the tax? d. At the output level in part (c), how much is the tax? e. How much tax revenue does government collect? f. What is the deadweight loss borne by society if the externality is left uncorrected?
Tax Memorandum TO: Mr. Green FROM: DATE: Week 4 RE: Gambling Activities Issue One and Applicable Case Law, Code & Regulations It has come to our attention that you requested to know which criteria is used to determine if your gambling activities constitute a trade or business status for the federal income tax purposes and if we think your gambling activities qualify for trade or business status. The case of Commissioner v. Groetzinger, 480 U.S. 23 1987 is approriate for deciding if the gambling activity has trade or business status. The Supreme Court stated that some factors had to be considered by the commissioner in determining if a taxpayer’s gambling activities constitute trade or business status. Treasury Regulation
Judgement Case 9-1 – Inventory costs; lower of cost or market; retail inventory method Requirement 1 Theoretically, Hudson should account for the warehousing costs related to its wholesale inventories as a part of inventory. All of the necessary costs associated with preparing, and in this case storing, items for sale are to be included in inventory. The key here is that the warehousing cost is related to a particular set of items and for that reason it is important to account for the warehousing cost with the inventory in order to satisfy the matching principle. The matching principle “requires that revenues and any related expenses be recognized together in the same period” (The matching principle). By following the matching principle all of the costs associated with a particular product, not just its wholesale price, is expensed when the item is sold.
Calculate the PAYG instalment income and the instalment due to the ATO. Complete the BAS Summary boxes below. Using a general journal format, explain how the payment transaction would be recorded in the accounting system. Supplies you have made Total sales & income & other supplies including capital (GST inclusive) G1 Exports Other GST-free supplies Input taxed sales & income & other supplies ADD G2 + G3 + G4 G1 minus G5 G6 Adjustments (must be total transaction value, i.e. GST inclusive) ADD G6 + G7 Divide G8 by eleven G9 66 191 728 100 G2 G3 Acquisitions you have made Capital acquisitions (GST inclusive) All other acquisitions (GST inclusive) ADD G10 + G11 Acquisitions for making input taxed sales & income & other supplies Acquisitions with no GST in the price Total estimated private use of acquisitions + non-income tax deductible acquisitions ADD G13 + G14 + G15 G7 G8 0 728 100 G12 minus G16 Adjustments (must be total transaction value, i.e.
Since debt and equity levels are closely related there is an analysis called the “DuPont model” that systematically breaks ROE into components so that each can be evaluated. ROE = NI x EBT x EBIT x Sales x Total assets EBT EBIT Sales Total assets Common equity EBT = earnings before taxes. The first ratio measures the proportion of earnings before tax that is kept by the company. EBIT = earnings before interest and taxes. The second ratio measures the effect of interest; it indicates the proportion of earnings before interest and tax that is retained after paying interest.
The Truth-In Lending Act The Truth-In Lending Act The Federal Truth in Lending Act of 1968 (TILA) was designed to provide the consumer with information regarding the actual cost of credit. Before TILA, the stated interest rate of a loan was calculated in different ways to the benefit of the lender and against the borrower. The TILA made it obligatory for all lenders to state the annual percentage rate (APR) and to make it consistently calculated so that the consumer would be able to compare the interest rates and calculate the cost of borrowing themselves. The actual outcome of the law has been different. “The law's critics contend that a mismatch between the required disclosures and the information that the consumer needs to compare
Cui xin yuan Case 11 -1 Polluter Corp Objectives: the appropriate classification in the statement of cash flows for the company’s purchase and sale of Emission allowances Accounting pronouncement: ASC 230 -10 statement of cash flow ASC 350 -30 -25 -3 General Intangibles Other than Goodwill Question 1: What is the appropriate classification in the statement of cash flows for the company’s purchase of Emission Allowances? The recognition of intangibles is defined under ASC 350 -30 -25 -3[Costs of internally developing, maintaining, or restoring intangible assets that are not specifically identifiable, that have indeterminate lives, or that are inherent in a continuing business or nonprofit activity and related to an entity as a whole, shall be recognized as an expense when incurred According to case, Upon receipt of the EAs, the Company recorded the EAs as intangible assets with a cost basis of zero, in accordance with The Federal Energy Regulatory Commission (“FERC”) accounting guidance for EAs. And To meet its need for additional EAs in fiscal years 2010–2014, on April 2, 2010, the Company spent $3 million to purchase EAs with a vintage year of 2012 from Clean Air Corp Acquiring of emission allowances means that Polluter Corp. had to buy allowances from another company. The emission allowances re regarded as tangible assets with zero cost basis. because the Emission and the cost of emission allowances have indetermination lives and inherent in a continuing business , the emission allowance is recognized as expense when incurred.
Conclusion I would suggest to Ali that with the above information he should register for tax as it is more than likely that he will be classed as trading. Principles of VAT VAT is an indirect charge which is charged on most goods and services supplied in the UK and are borne by the final customer. There are three essentials that have to be taken into account before VAT can be charged these are: Taxable Person – a taxable person is someone that charges vat on goods and services which are supplied within the UK; they must be registered for VAT as they make taxable supplies. A person can be an individual or a legal person such as a company. Taxable Supply – is everything which is not exempt or outside the scope of VAT.
The tax system in Azerbaijan is defined with the statutory tax regime and governed by Tax Code of Azerbaijan. According to Tax Code, following tax types are defined: Profit tax, Value added tax (VAT), Property tax, Personal income tax, Mining tax, Land tax, Excise tax, Road tax, Simplified tax. The Tax Code also determines the general principles of taxation, including the payment/collection of taxes, methods of taxations, responsibilities and rights of taxpayers and State etc . Moreover, according to tax code, “should any tax legislation conflict with legislation in other areas, with the exception stipulated below, the provisions of Tax Code shall prevail. Should any international treaties to which the Republic of Azerbaijan is a party, provide