Leasing the building will allow John to write off the payments as rent expense. However, if he has the capital to purchase the building, it would be considered an asset and he would be allowed to depreciate over the life of the building. This decision would have to weigh factors such as: capital investment, loan options if no capital investment, and expected future profits and expenses of the business. 2. Jane Smith tax issues: Issue a) What are the different tax consequences between paying down the mortgage (debt) and assuming a new mortgage (debt) for federal income tax purposes?
INTERMEDIATE ACCOUNTING II/ Intermediate Accounting, Spiceland/Sepe/Nelson Re: Judgment Case 18-5 Requirement 1. The two alternatives Alcoa has for accounting for the repurchase of it’s shares are: 1) The shares can be formally retired. 2) The shares can be named treasury stock Either way, total shareholders’ equity remains the same. Cash is used to repurchase common stock so the effect is to reduce both cash and shareholders’ equity. This choice does, however, affect how individual shareholders’ accounts are reported in the balance sheet.
| | | | (40-50 min.) P 12-42B Req. 1 Georgia Optical Corporation | Balance Sheet | December 31, 2012 | ASSETS | LIABILITIES | Current assets: | | Current liabilities: | | Cash | $ 49,000 | Accounts payable | $ 33,000 | Accounts receivable, net | 107,000 | Accrued liabilities payable | 15,000 | Inventory | 106,000 | Dividends payable | 6,000 | Prepaid expenses | 14,000 | Total current liabilities | $54,000 | Total current assets | $276,000 | Long-term liabilities: | | | | Long-term note payable | 103,000 | Long-term assets: | | Total liabilities | 157,000 | Property, plant, and | | | | equipment, net | 277,000 | STOCKHOLDERS’ EQUITY | | | | Paid-in capital: | | Intangible assets: | | Preferred stock, 5%, $14 par, 50,000 shares | | Goodwill | 61,000 | authorized, 7,000 shares issued | 98,000 | | | Common stock, $4 par, 125,000 shares | | | | authorized, 25,000 shares issued | 100,000
(0.5 points) 5. What is a debt settlement program? (0.5 points) Debt settlement programs are programs that claim they can get you out of debt by negotiating your debt to a much lower amount and working out a payment plan with your creditors. 6. What is
Moreover, Small Fries Inc. should not report the repairs and maintenance in their balance sheet as aggregate cost but instead designated the expense to each facility as each expense is incurred. According to 210-10-S99 SEC materials, Accumulated depreciation, depletion, and amortization of property, plant and equipment. The amount is to be set forth separately in the balance sheet or in a note thereto. It should be recorded in the year when it is happening and make notes to the financial statement to that
First, according to the ASC 605-25-25-6, “a delivered item or items that do not qualify as a separate unit of accounting within the arrangement shall be determined for those combined deliverables as a single unit of accounting.” If the Power starterpack is not a separate deliverable, it shall be considered as a single unit of accounting, which is not a separate unit of accounting. Power starterpack is sold as a bundle, and only one stream of revenue. That means the activation card has to be sold as combination with service, and only recognize $200 as revenue. 2. The activation card is a separate deliverable and a separate unit of accounting.
GAAP prohibits presentation of cash flow per share while IFRS does not explicitly prohibit it. GAAP says: interest classifies as operating, dividends classify as operating, and dividends paid are classified as financing. IFRS requires that each of the three be reported in a consistent
Question: : (TCO D) On December 31, 2010, Irey Co. has $2,000,000 of short-term notes payable due on February 14, 2011. On January 10, 2011, Irey arranged a line of credit with County Bank which allows Irey to borrow up to $1,700,000 at one percent above the prime rate for three years. On February 2, 2011, Irey borrowed $1,700,000 from County Bank and used $300,000 additional cash to liquidate $1,700,000 of the short-term notes payable. The amount of the short-term notes payable that should be reported as current liabilities on the December 31, 2010 balance sheet which is issued on March 5, 2011 is 9. Question: : (TCO D) Tender Foot Inc. is involved in litigation regarding a faulty product sold in a prior year.
Chapter 8: Date placed in service (see concept summary 8.1 in the text). The applicable system of depreciation or cost recovery is dependent on the date the property is placed in service. The small business jobs act of 2010 extended 50% additional first-year depreciation for qualified property acquired and placed in service before january 1, 2011. The tax relief act of 2010 extended additional first-year depreciation for qualified property acquired and placed in service before january 1, 2013. The percentage is 100% for property placed in service after september 8, 2010 and before january 1, 2012.
Mr. Smith, The $300,000 fee that you earned off of the case could be used in your gross income as directed by Section 61(a) of the Code. The code states that gross income is limited to this item, but that this is merely the most typical source of income. Due to not knowing your combined AGI, it is not known what the tax implications would be completely. Being a LLC has major advantages of a corporation. Your personal assets are not subject to claims of the corporation’s creditors, only your investments in the corporation are subject to any claims.