Comprehenive Problems Week 3

The rise in revenue was rapid starting from the year of operations. The key period of business was from April to September were revenues were equal to 65% of total revenue as the product was seasonal. The basis of forecasting for the year 1981 & 1982 is the expectations of sales by Mr. Turner & Mr. Rose. It is given that total sales were $ 15.80 million in first half of year 1981 and the total sales in 1981 to reach $ 30 million. Profit after tax was expected to be $ 1 million for 1st half and we assumed for the next half, profit will be in proportion to first half & expected to be amounting to $ 0.90 million. For year 1982, the sales expectation by Mr. Rose was around more than $ 71 million &

a. Ken won $1,200 in an illegal game of poker (the game was played in Utah, where gambling is illegal).

T, an individual taxpayer, plans to incorporate his farming and ranching activities, currently operated as a sole proprietorship. His primary purpose of incorporating is to transfer a portion of his ownership in land to his son and daughter. T believes that gifts of stock rather than land will keep his business intact. Included in the property he plans to transfer is machinery purchased two years earlier.

19) In the current year, Bonnie, who is single, sells stock valued at $60,000 to Linda for $15,000. Later that year, Bonnie gives Linda $25,000 in cash. Bonnie's taxable gifts from these transfers total

g. On December 31, 2012, the company completed the work on a contract for an out-of-province company for $7,900 payable by the customer within 30 days. No cash has been collected and no journal entry has been made for this transaction.

3.) . Should the February 1, 2012, agreement and the May 1, 2012, agreement be accounted for separately or as a single arrangement?

With this, a payment is received before a product or service is rendered. An example is when a lawyer is put on retainer for future correspondence. A third type of an adjusting entry is an accrued expense. These incur during one monthly, quarterly, or annually accounting period but paid for in the next. (Editorial Board, 2012, p. 45) This occurs when a loan is made or services are established and yet no invoice has been received. Accrued revenue, the last type of adjusting entries can happen when several milestones are made with one company although the purchaser may not be billed but once for all milestones

- The Bet-r-Bilt Company has a 5-year bond outstanding with a 4.30 percent coupon. Interest payments are paid semi-annually. The face amount of the bond is $1,000. This bond is currently selling for 93 percent of its face value. What is the company's pre-tax cost of debt?

If, at year end, 2 months have elapsed, what adjusting entry do you record? 2,000 A. Prepaid Legal Expense Legal Expense 2,000 2,000 B. Legal Expense Prepaid Legal Expense 2,000 Legal Expense 3,000 C. Prepaid Legal Expense 3,000 12,000 D. Prepaid Legal Expense Cash 12,000 [10]BASIC BANK10 - COAE 010 On September 1, your firm incurs a routine $82 expense, mistakenly recording it as follows: Office Expense Accounts Payable 28 28

. (TCO 2) Barry owns a 30% interest in a partnership that earned $300,000 this year. He also owns 30% of the stock in a C corporation that earned $300,000 during the year. The partnership did not make any distributions, and the corporation did not pay any dividends. How much income must Barry report from these businesses? (Points : 2)

Consequently, according to the information, Deyonne’s income of last year was 80 sheep, while Batonne’s income was that 20 sheep plus 40 sheep that were traded for 10 additional land and 5 coats equaling 8(1/3) sheep. Therefore, Deyonne’s income of 80 sheep was versus Batonne’s income of 68(1/3) sheep. Deyonne’s income was greater for the past

This is Tom’s third year in the real estate business and he has prepared his own tax returns in previous years. His recordkeeping is shoddy and it seems that Tom wants to deduct as much as possible in business expenses, but his accountant wants to avoid being completely erroneous.

iii. The total income statement impact is exactly the same. The computations turn out to be identical because it is essentially a backwards way of computing the initial cost of the asset of $10,673, minus the proceeds from the sale $7,500, which both gives you $3,173. The difference between the two is perception. One reports a gain on disposals, while the other reports a loss.

Inciting Incident- When the check comes, they don’t know what to do with it since everybody has their own idea on how to spend the money.

501. Dependents who checked A. Amount, if any, from line 1 on front . . . . . . + 300.00 Enter total A. one or both 950.00 B. Minimum standard deduction . . . . . . . . . . . . . . . . . . . . . B . boxes