They were given a 10% discount by the manufacturer. They paid $400 for shipping and sales tax of $3,000. Stine estimates that the machinery will have a useful life of 10 years and a residual value of $20,000. If Stine uses straight-line depreciation, annual depreciation will be • $3,760. • $4,072.
Their cash flow is the net income plus depreciation. C. Now, suppose the company changes its depreciation calculation procedure (still within GAAP) such that its depreciation expense doubled. How would this change affect Brandywine’s net income, total profit margin, and cash flow? The depreciation will be $3,000,000. Their total revenue will be subtracted from their total expense which will be their net income.
She also has the possibility of taking an unsecured loan from her own bank of £3000 where the variable APR charged is currently 12 per cent. Panna has also just received a letter from a different bank to apply for a credit card on which the variable interest rate on new purchases for the first four months would be 0 per cent p.a. and would then rise to the normal variable rate (currently the normal rate is 18 per cent p.a.). • Panna could use all her savings to fund the purchase of the furniture outright. State one advantage and one disadvantage of this course of action.
Our goal is to review the current budget, balance sheet, and cash flow statement and find areas that be trimmed, which will allow for additional savings. Summary of key findings from personal budget, balance sheet, and cash flow statement The following ratios were calculated: Debt ratio - .76 Current ratio – 1.43 Liquidity ratio – 1.05 Debt-payment ratio - .11 Savings ratio - .028 The two ratios that are of concern are liquidity and savings. Liquidity ratio determines the number of months that the family can pay living expenses in case of an emergency. It is recommended to have 3-6 months of monthly living expenses available. George and Dora have enough for only one month.
2. Purchasing the satellite phone, would deepen his deficit by £25 pcm for two years. 3. They would be entitlement to state benefits once the child was born i.e. Child Benefit, a universal non-contributory; non-means tested tax free benefit for parents to claim (Personal Finance, Chapter 2, Page 79) and Child Tax Credit, although entitlement depends on a number of factors i.e.
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 &
Why? 4. Which of the following trade or business expenditures of Ajax Inc. are deductible on its current year tax return? If an expenditure is not deductible, explain why it is not a valid deduction. Expenditure Amount Salaries and wages to employees $400,000 Purchase of new office
Memo To: John & Jane Smith From: Date: 12/2/2014 Re: Summary of various tax issues Your first question is how is the $300,000 treated for purposes of federal tax income? In Code 61(a), income derived from services is one of the listed forms of taxable income. This includes fees, commissions, fringe benefits and similar items. Since the compensation was earned this year, even though you worked on the case for two years, you will include it as ordinary income this year. You can reduce your tax liability by deducting necessary business expenses that were paid in the same
According to nationalpriorities.org, the federal government raises trillions of dollars in tax revenue each year so the government is able to support specific government welfare programs. Working taxpayers are being to be forced to take financial responsibility for those who do not take responsibility for themselves. Newton Gingrich, an American Politian writes in his essay “Renewing America,” “As individuals we are each responsible for our own actions and their consequences. If peoples actions results in a drop in their own well- being that is their own personal responsibility and they should take the brunt of the