You are to refer to Kate Minimart operation below:Kate operates a minimart store located in a private estate. She invested$20,000 of her own funds and took an additional $10,000 bank loan to payfor the renovation and store fittings totaled $22,000, balance funds to usefor operation needs.Kate paid a monthly rent of $5,000 for the store. The minimart sells avariety of goods estimated a total worth of $10,000. All sales are on cashbasis amounting to about $12,000 to $14,000 each month. Kate is at a losshow to prepare the accounts for her business.You will perform the following:(0)Select an accounting principle and explain how it can be applied toKate Minimart3 You will perform the following:(0)(ii)(11)the accounts for her business.(iv)Select an accounting principle and explain how it can be applied toKate Minimart.Perform research on the assets of the operation above.It should include:Description of the assets2 examples of accounts included under the assets1 transaction that increases and 1 transaction that decreases theassetsSelect THREE (3) transactions that Kate Minimart performs andillustrate their effect on the accounting equation.Select ONE (1) financial statement to prepare at period end.Describe the following:-the purpose of preparing the statementthe key componentsONE (1) user and how he can use its informationprovide a brief format of the selected financial statement (with nonumbers).

Name: You are to refer to Kate Minimart operation below:Kate operates a min
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Description: You are to refer to Kate Minimart operation below:Kate operates a minimart store located in a private estate. She invested$20,000 of her own funds and took an additional $10,000 bank loan to payfor the renovation and store fittings totaled $22,000,

There are primarily four types of financial statements, each serving different purposes, that are…

Business

Accounting

You will perform the following: (0) (ii) 3 LI KID (IV) Select an accounting principle and explain how it can be applied to Kate Minimart. Perform research on the assets of the operation above. It should include: Description of the assets 2 examples of accounts included under the assets 1 transaction that increases and 1 transaction that decreases the assets Select THREE (3) transactions that Kate Minimart performs and illustrate their effect on the accounting equation. Select ONE (1) financial statement to prepare at period end. Describe the following: -the purpose of preparing the statement the key components ONE (1) user and how he can use its Information provide a brief format of the selected financial statement (with no numbers).

You will perform the following: (0) (ii) 3 LI KID (IV) Select an accounting principle and explain how it can be applied to Kate Minimart. Perform research on the assets of the operation above. It should include: Description of the assets 2 examples of accounts included under the assets 1 transaction that increases and 1 transaction that decreases the assets Select THREE (3) transactions that Kate Minimart performs and illustrate their effect on the accounting equation. Select ONE (1) financial statement to prepare at period end. Describe the following: -the purpose of preparing the statement the key components ONE (1) user and how he can use its Information provide a brief format of the selected financial statement (with no numbers).

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter3: Income Sources

Section: Chapter Questions

Problem 79P

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(iii) (iv) element Select THREE (3) transactions that Kate Minimart performs and illustrate their effect on the accounting equation. Select ONE (1) financial statement to prepare at period end. Describe the following: -the purpose of preparing the statement the key components ONE (1) user and how he can use its information provide a brief format of the selected financial statement (with no numbers).
Renee operates a proprietorship selling collectibles over the Web, and last year she purchased a building for $24 million for her business. This year, Rene’s proprietorship reported revenue of $95.5 million and incurred total expenses of $88.6 million. Her expenses included cost of goods sold of $48.5 million. Sales commissions paid of $16.9 million. $10.5 million of interest paid on the building mortgage, and $12.7 million of depreciation. What’s Renee’s adjusted taxable income for purposes of calculating the limitation on business interest expense? What is the maximum amount of business interest expense that Renee can deduct this year, and how is the disallowed interest expense (if any) treated? Suppose that Renee’s revenue includes $5 million of business interest income. What is the maximum amount of business interest expense that could be deducted this year under the business interest limitation?
[The following information applies to the questions displayed below.] Renee operates a proprietorship selling collectibles over the Web, and last year she purchased a building for $24 million for her business. This year, Renee's proprietorship reported revenue of $95.5 million and incurred total expenses of $88.6 million. Her expenses included cost of goods sold of $48.5 million, sales commissions paid of $16.9 million, $10.5 million of interest paid on the building mortgage, and $12.7 million of depreciation. c. Suppose that Renee's revenue includes $5 million of business interest income. What is the maximum amount of business interest expense that could be deducted this year under the business interest limitation? (Do not round intermediate calculations. Enter your answer in millions of dollar rounded to 2 decimal place.) Deductible Business Interest Expense $ 12.53 million
10 You are to refer to Kate Minimart operation below: Kate operates a minimart store located in a private estate. She invested $20,000 of her own funds and took an additional $10,000 bank loan to pay for the renovation and store fittings totaled $22,000, balance funds to use for operation needs. (ii) Kate paid a monthly rent of $5,000 for the store. The minimart sells a variety of goods estimated a total worth of $10,000. All sales are on cash basis amounting to about $12,000 to $14,000 each month. Kate is at a loss how to prepare the accounts for her business. You will perform the following: (1) 6 Select an accounting principle and explain how it can be applied to Kate Minimart. 2 Perform research on the assets of the operation above. it should include: Description of the assets 2 examples of accounts included under the assets 1 transaction that increases and 1 transaction that decreases the assets
Review the following scenario: Scenario: Hart Nance and Jason Symington operate gift boutiques in shopping malls. The partners split profits and losses equally, and each takes an annual drawing of $80,000. To even out the workload, Nance travels around the country inspecting their properties. Symington manages the business and serves as the accountant. From time to time, they use small amounts of store merchandise for personal use. In preparing for his daughter's wedding, Symington took inventory that cost $10,000. He recorded the transactions as follows: Debit Credit Cost of Goods Sold $10,000 Inventory $10,000 Respond to the following questions and, if appropriate, include personal experience as part of your answers. How do you feel Symington should have recorded these transactions? Why? What are the ethical implications of Symington's actions?
Rita is keen to grow her business and provided some information on two transactlons that she undertook during the year. The first was the purchase of an individual asset for the business called a Techpager. wwym ww The initial cost of the machine itself was $32,000 with several extra required fees and charges. Rita also decided to include a number of optional extras in the purchase. Installation of Techpager $1500 Transportation and Shipping Costs $600 Extended Warranty/Service Program $300 per year. This is an optional service offered by the company that covers all maintenance and repairs costs and is paid annually in advance Sorting and Stapling Unit $1200 (required to allow Rita to produce the booklets for her business) Custom Painting $400 (Rita does not need to have this done but has decided she wants the machine to match her office décor) Insurance $500 per year payable in advance Prepare a general Journal entry to record the individual of the purchase business called Techpager.
Scenario: Hart Nance and Jason Symington operate gift boutiques in shopping malls. The partners split profits and losses equally, and each takes an annual drawing of $80,000. To even out the workload, Nance travels around the country inspecting their properties. Symington manages the business and serves as the accountant. From time to time, they use small amounts of store merchandise for personal use. In preparing for his daughter's wedding, Symington took inventory that cost $10,000. He recorded the transactions as follows: Debit Credit Cost of Goods Sold $10,000 Inventory $10,000 Respond to the following questions and, if appropriate, include personal experience as part of your answers. • How do you feel Symington should have recorded these transactions? Why? • What are the ethical implications of Symington's actions?
Alice is a high school teacher who enjoys knitting. She knits scarves and sweaters and sells them in a local boutique. Alice spends 10 to 15 hours a week knitting the scarves and sweaters. Alice had sales of $6,000 and expenses of $10,000 related to knitting and selling the goods. Alice's $10,000 of expenses consisted of $800 of interest expense and $1,600 in property taxes for her building and tools, $3,000 in supplies, and $4,600 in depreciation charges. How would Alice's income and expenses be reported on her tax return if her knitting activity is characterized as a hobby in 2019?
Tom and Davidson go into business together as a partnership selling computer software through the Internet. On January 1 they each put $6,000 as capital and this goes into their local bank account for the company. They bought computer equipment for $10,000 in which they paid by check and set up for business in Davidson's dad's basement. The cost of computer equipment will be amortized over the next three years with a disposable value of $1000. Davidson's dad has agreed to let them operate out of his basement if they pay him a rent of 10% of their annual profit or $1,200 per year whichever is greater. At the end of the first month of business, they have made no sales and incurred no expenses other than the amortization rate of the computer equipment and the rent which is owed to Davidson's dad. At the end of January, what is the accounting equation (assets, liabilities and equity)
Cynthia found various ways to make use of her money to generate income. The following summarizes all the income she was able to derive from her use of money: • Interest income from loans granted to online sellers who did not have enough capital on their own - P25,000 • Interest income on a 90-day time deposit with BPI. The amount of deposit is P500,000 which pays 7% interest per annum. The interest was already credited to her account. • Interest income on her savings account maintained in her cooperative - P5,000 • Interest income on promissory notes of clients – P7,000 How much interest income is subject to final tax? a. P40,750 b. P15,750 c. P13,750 d. P8,750
Cynthia found various ways to make use of her money to generate income. The following summarizes all the income she was able to derive from her use of money: • Interest income from loans granted to online sellers who did not have enough capital on their own - P25,000 • Interest income on a 90-day time deposit with BPI. The amount of deposit is P500,000 which pays 7% interest per annum. The interest was already credited to her account. • Interest income on her savings account maintained in her cooperative - P5,000 • Interest income on promissory notes of clients – P7,000 How much interest income is subject to final tax? а. Р40,750 b. P15,750 с. Р13,750 d. P8,750
Betty borrowed $200,000 at an interest rate of 10% p.a. from XYZ bank to purchase the goodwill, premises, equipment and stock of a cookware shop. As security for the loan, she was required to mortgage her holiday home. Please discuss whether the interest would be deductible