h. Would Jane (and John) realize better tax benefits if she had a separate business for her jewelry-making activities? i. What tax benefits would John realize if he invested $15,000 in Jane's jewelry making? j. Can Jane depreciate her vehicle or jewelry-making equipment?
Hi John and Jane, Please find my advice and recommendations on your tax issues below: John Smith tax issues: A – The $300,000 will be included as gross income. It is compensation for services rendered. B – I am having trouble understanding this $25,000 recovery for expenses paid. Was this the amount of money the client had already paid out of his pocket for your services? Or did you suffer these expenses to work on this case?
A single point is a payment of one percent of the amount of the total mortgage loan. If you were borrowing $200,000 a single point would require an upfront payment of $2,000. When you are evaluating alternative mortgages, you may be able to obtain a lower rate by making an upfront payment. This comparison will not include an after-tax comparison. When taxes are considered, the effective costs are affected by interest paid and the amortization of points on the loan.
Since Nike has bonds outstanding, then the YTM on those bonds (7.13%) is the market-required rate on the Nike’s debt. In order to solve for the total debt, I had to find out the market value of the debt. In doing so I multiplied the book value by the percent of face value that the debt was currently selling for (.9560) or the present value of the debt. I was able to use my calculation from the CAPM as my cost of equity (10.36%). In solving for the percentage of debt I simply subtracted my percentage of equity from 100.
Problem 18-4 Suppose Goodyear Tire and Rubber Company is considering divesting one of its manufacturing plants. The plant is expected to generate free cash flows of $1.5 million per year, growing at a rate of 2.5% per year. Goodyear has an equity cost of capital of 8.5%, a debt cost of capital of 7%, a marginal corporate tax rate of 35%, and a debt-equity ratio of 2.6. If the plant has average risk and Goodyear plans to maintain a constant debt-equity ratio, what after-tax amount must it receive for the plant for the divestiture to be profitable? We can compute the levered value of the plant using the WACC method.
1. Billy Dent, as the owner of an apartment building, receives and makes the following payments during 2012: Received in January 2012 rent that was $5,000 due in December 2011 Received in December 2012 rent not 4,000 due until January 2013 Security deposit which is to be 500 refunded when tenant vacates the apartment How much rental income must Billy Dent include on his 2012 income tax return? 2. Arnold and Barbara Cane were divorced in June 2012. Pursuant to the divorce decree, Arnold is obliged to perform as follows: a.
One Sample Hypothesis Testing Team A Frances Barr, Erin Ferreira, Lynette Gill, Lauren Gilpin, Wayne Varner RES/342 January 8, 2012 Michelle Lane, PhD One Sample Hypothesis Testing The data set for Century National Bank contains a sample of savings account dollar amounts for 60 customers. This sample will serve as the basis for research into determining the sample mean and population mean of Century National Bank customers’ savings account balances. The research question is do Century National Bank customers average $1500 or more in their savings accounts? We will use the five-step hypothesis test for this research. Step One To answer this research question, we have formulated a null hypothesis and an alternative hypothesis.
• debit to Allowance for Doubtful Accounts for $3,300. Multiple Choice Question 182 The financial statements of the Melton Manufacturing Company reports net sales of $300,000 and accounts receivable of $50,000 and $30,000 at the beginning of the year and end of year, respectively. What is the average collection period for accounts receivable in days? • 60.8 • 96.1 • 36.5 • 48.7 Find the final exam answers here ACC 291 Final Exam Answers Multiple Choice Question 119 Stine Company purchased machinery with a list price of $64,000. They were given a 10% discount by the manufacturer.
Assignment 1: Financial Project Math 104 Dan Burnell Five years ago, I bought a house for $151,000.00 with a down payment of $30,000, which means I took a loan for $121,000.00. My interest rate was 5.75% fixed. I would like to pay more on my loan. I check my bank statement and find the following information: Escrow Payment: $211.13 Principle And Interest Payment: $706.12 Total Payment: $917.25 Current Loan Balance: $112,242.47 I need to explain how much additional money i would need to add to my monthly payment to pay off my loan in 20 years instead of 25 years. If I took 25 years to pay off my loan the monthly Payment would be $761.22 per month.
For instance you cannot deduct losses from hobbies but you could deduct business expenses and losses if she actually turned it into a business. For example the money she spent on the equipment that she owns could count as a deduction if it was a business instead of just a hobby. Conclusion: I would recommend starting up a business seeing how there is the intent to make a profit anyways and you would be entitled to business expense deductions that you otherwise would not be entitled to. Issue D) Would Jane (and John) realize better tax benefits if she had a separate business for her jewelry-making activities? Applicable Law &