$4,000 4) The interest paid for the loan for stocks, bonds, and securities is only deductable up to the Net Income amount of the Interest Income. If interest income was $7,000 and expenses were $500, then Net Interest Income is $6,500. Mike and Sally paid $15,000 of interest on the loan for the stocks, bonds, and securities so they are allowed to deduct $6,500 and the leftover expense, can be carried forward to the next year. THEREFORE: The total deductable interest is $13,000. (2,500+4,000+6,500=$13,000) 8-40) A) Charlie is allowed the tax deduction of the charitable contribution at the basis price of $600 because it is defined as ordinary income property.
CONCLUSION MegaCorp, Inc. must capitalize the $5 million payment for the infringement liability as capital expenditure. ANALYSIS According to section 162, a deduction is allowed on all ordinary and necessary expenses paid or incurred during the taxable year in carrying in on any trade or business. Unfortunately for MegaCorp, Inc., the payment of a liability owned by a company that they acquired does not qualify as necessary business expense. Section 263 states that any amount paid out for new buildings or for permanent improvements or betterments made to increase the value of any property or estate, is not allowed any deduction. Since MegaCorp, Inc. had purchased Little, Inc. and obtained all their assets, the payment for the infringement liability must be capitalized in the year
(Points : 5) sales under $1,000,000 no accountants on staff insignificant receivables and payables all sales and purchases on account 5. (TCO D) Two companies report the same cost of goods available for sale, but each employs a different inventory costing method. If the price of goods has increased during the period, then the company using _____. (Points : 5) LIFO will have the highest ending inventory FIFO will have the highest cost of goods sold FIFO will have the highest ending inventory LIFO will have the lowest cost of goods sold 6. (TCOs A, E) Equipment with a cost of $192,000 has an estimated salvage value of $18,000 and an estimated life of 4 years or 12,000 hours.
When considering how Small Fries Inc and its other facilities should record the costs associated with OSHA compliance on their financial statements as either capitalized as an asset or charged to expenses. We should consider the types of repairs that will be done. Whether they are ordinary repairs or major and extraordinary repairs that will benefit the companies more than one year or operating cycle. According to ASC 360 -10- 25- 5 Planned Major Maintenance Activities, The use of the accrue-in-advance (accrual) method of accounting for planned major maintenance activities is prohibited in annual and interim financial reporting periods. GAAP defines a company's assets as the things it owns or controls that have measurable future economic
The primary customers of KR+H cabinetry are those who want to optimize the amount of useable space in their homes that stock cabinets cannot provide. The industry in 1992 was comprised of 61% stock cabinetry, and custom cabinets similar to those produced by KR+H comprised of only 20%. This is down from 26% in 1989 resultant from poor economic conditions between 1989 and 1992. KR+H uses a direct sale to consumer approach that only accounted for 2% of total industry sales. Industry sales by use of cabinet dealers and distributors contributed for 31% and 30% respectively.
Hall O’ Fame Products is a nationwide sporting goods manufacturer. The company operates with a widely based manufacturing and distribution system that has led to a highly decentralized management structure. Each division manager is responsible for producing and distributing corporate products in one of eight geographical areas of the country. Division managers are evaluated using a performance measure that is calculated as the division's contribution to corporate profits before taxes less a 20 percent investment charge on the division's investment base. The investment base of each division is the sum of its year-end balances of accounts receivable, inventories, and net plant fixed assets (cost less accumulated depreciation).
As the success of the fur trade began seeming limited, traffickers of the fur trade began exporting and importing products, which were domestically produced. This business approach culminated in the Bank of Montreal in 1817, which lead to the creation of the Committee of Trade in 1822. The economy hadn’t bloomed until the 1860’s, but then found that insurance companies, stocks exchanges and the banks drove the financial industry. Montreal was arguably the capital of business in Canada at this time, with their largest competition coming from the Upper Canada region (Toronto). After generations of relying on trade and commerce, Montreal had gained recognition as a major industrial center.
Why? If one market crashes it creates a ripple affect, thus effecting Canadians in greater numbers than her current situation. Despite Canada's struggle to regain it's footing economically, Mary Jones claims in her Globe and Mail article that "the Canadian economy has, no doubt, recovered majority of the jobs lost during recession, but the job growth in the nation is still a far cry considering the underlying employment market weaknesses" (Jones, M. p. 1). In addition, Sonya Gulati and Derek Burleton, economists with TD Bank, maintain that the past year had been a good year in terms of job growth in Canada, but, not the best year. And this is especially true for the Canadian provinces of Alberta, Ontario, New Brunswick and Nova Scotia where the employment growth is a still to reach the pre-recession levels (Jones, M. p. 1).
Pert Plus was a breakthrough product and P&G would have first-mover advantage in the largest segment of the hair care market. Negatives were the poor performance of the original Pert shampoo and the perception it was a product for men. Establishing the optimal price in the Canadian market was one of P&G’s biggest challenges. The company had to make three pricing decisions. 1.
His vision is to make the company capable of building any luxury home, in any style, in any place where there is an opportunity. At the strategic level, Toll’s managers have to find ways to grow. The company plans to grow by 15 to 20 percent per year, taking advantage of the fact that the housing industry is typically regional and no national players dominate. Middle-level managers develop tactical goals to help support the firm’s strategic goals. These involve doing market studies and findings ways to cut costs in the building process.