Question 5. (TCOs 3, 4, 5, & 7) During the past two years, through extensive advertising and improved customer relations, Beech Corporation estimated that it had developed customer goodwill worth $100,000. For the current year, determine the amount of goodwill Beech Corporation may amortize. Question 6. (TCOs 3, 4, 5, & 7) Damien, not a dealer in real estate, sold real estate with a basis of $250,000 for $500,000 cash, a note for $250,000, and the buyer assumed Damien’s mortgage on the property of $125,000.
THRIFTYFUEL are going to increase their prices by 12%. You have to : • decide which electricity supplier to use • work out how much each person owes for the last electricity bill. 1A Here are the prices from five suppliers: POWER4U: £560.98 - No increase in the cost of electricity E –city: £526.03 - No increase in the cost of electricity WEST POWER: £545.50 – None Leco: £524.13 - Maximum increase of one-tenth (maximum price can be: £524.13+ (£524.13*0.1)= £524.13+ £52.41= £576.54 ) THRIFTYFUEL: £481.27 + 12% - None Which suppliers’ annual cost in year 1 is less than thriftyfuel? Show how you decide: Thriftyfuel price is £ 481.27+ 12%=£481.27+ £57.75= £539.02 £481.27*0.12= £57.75 The suppliers are : LECO and E-CITY. 1B You decide to save money by changing your electricity supplier.
$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.
Chapter 07 - The Revenue and Collection Cycle Chapter 07 The Revenue and Collection Cycle Multiple Choice Questions 1. To be recognized, revenues must also be realized or realizable and A. Foreseeable B. Collected C. Earned D. Shipped 2. The SEC requires all of the following for revenue to be recognized except A.
In February 2011, the case is settled, and Joe refunds $2,500 to the customer. When Joe prepares his 2010 tax return in April 2011, he will include only $1,500 of net revenues from that customer. Your Answer: False The claim of right doctrine requires the recipient of disputed funds to recognize the income. Joe will include the full $4,000 in his 2010 taxable income because he had full control over the funds. He will be allowed to take a deduction on his 2011 tax return for the $2,500 repaid the customer.
If she were to move to another state where her marginal state rate would be 10 percent, would her choice be any different? Assume that Dana itemizes deductions. When the state rate is 5 percent, Dana would achieve the following returns from the Treasury bond or the corporate bond: The Treasury bond yields $1,125 or $30,000 x [.05 x (1-.25)] after tax. The corporate bond yields $1,282.50 or $30,000 x [.06 x (1 - .25 - .05(1-.25))] after tax. Note that the actual state rate is reduced by 25% to allow for the deductibility of state income taxes on the federal income tax return.
Chapter 2 Problems 33. Assumption A: If the company were a sole proprietorship, all operating income and expenses on Schedule C of an individual return. The long term capital gain would be taxed on the individual return as well, at a maximum rate of 15%. Assumption B: If the company were a corporation, income and expenses would be taxed at the corporate level and reported on Form 1120. No special tax rates for capital gains apply to corporations, the entire gain is included in income subject to normal corporate rates.
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.
Let’s look at contributing the $50,000 in exchange for stocks. According to Smith, Harmelink & Hasselback. Federal Taxation: Comprehensive Topics. CCH, 2013.Pg. 14-18, Code Sec.1032 states that a corporation does not recognize a gain or loss on the receipt of money or other property in exchange for its stock.
Earned income includes all the taxable income and wages one gets from working. According to the Internal Revenue Services (IRS), “taxable income includes wages, salaries, tips, union strike benefits, long-term disability benefits received prior to minimum retirement age, and net earnings from self-employment.” “A taxpayer's income can come from a number of sources other than regular employment, and can include exchanges of property or even bartering. Unless a type of income is specifically exempted from taxation by law, it will be considered taxable income” cited in IRS Publication 525. I am going to first talk about the individuals that are getting ready to prepare their tax return for the year ending 2009. I have a married couple who is looking to file a joint return.