1. In your new position as head accountant at Grab and Go, Inc. you noted that last month on July 2, 2018 the company bought "computers" for $500,000; your job is to lower their corporate taxes if possible. You decide to use MACRS for depreciation. The years in question are: 2017, 2018, 2020, 2022, 2024.

1. In your new position as head accountant at Grab and Go, Inc. you noted that last month on July 2, 2018 the company bought "computers" for $500,000; your job is to lower their corporate taxes if possible. You decide to use MACRS for depreciation. The years in question are: 2017, 2018, 2020, 2022, 2024.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

You have recently been hired as an Accountant for Arizona Corp., a manufacturer of equipment. Arizona follows ASPE but is considering becoming a public company in the next year. Arizona provides a 2 year warranty on its equipment sales and you are examining whether to treat the warranty as a Service-type or Assurance-type warranty for accounting purposes. Revenue would be realized on a straight-line basis if the Service-type approach is followed. Your research has uncovered the following data for 2020: Sales 50 units at $7,500 each (for simplicity assume all are cash sales and occur on January 1) Estimated warranty costs $700 per unit Actual 2020 costs incurred $25,000 Fair value of warranty $800 per unit a) For both the Service-type and Assurance-type approaches, prepare all necessary journal entries for 2020 b) Which approach is preferable? Support your conclusion with applicable account balances
A client owns a bakery that has been in business for three years. he has reached out to you, her CPA, for advice as she is planning on expanding her business and buying some equipment for her store. She has heard quite a bit from her fellow business owners about bonus depreciation and the ability to take an extra deduction in year one. She needs some advice on whether the assets qualify. She is planning on buying a new oven priced at $10,000, a new bakery display case priced at $5,000, a new connected refrigerator and freezer priced at $7,000, and a used commercial mixer priced at $5,000, and she plans to add some leasehold improvements to the building (work on air condition duct and roofing) priced at $20,000. Her business has been profitable for the last couple of years, averaging $500,000 a year. How she can apply depreciation, bonus depreciation, and any other special depreciation available for these assets she placed into service on January 1 of this year?
Your company has always depreciated assets using the straight-line method. Your tax accountant has explained that a switch to the double-declining balance method would minimize taxes in the current year, but you are concerned about the impact this change would have on the value of long-term assets on the balance sheet and future tax liabilities.Assuming your projected sales (and therefore tax bracket) are predicted to increase dramatically over the next 5 years, what should you do?
Cullumber Corp's controller was preparing the adjusting entries for the company's year ended December 31, 2023, when the vice- president of finance called him into her office. *Jean-Pierre," she said, "I've been considering a couple of matters that may require different treatment this year. First, the patent we acquired in early January 2021 for $591,000 will now likely be used until the end of 2025 and then be sold for $179,000. We previously thought that we'd use it for 10 years in total and then be able to sell it for $118,000. We've been using straight-line amortization on the patent." "Second, I just discovered that the property we bought on July 2, 2020, for $267,200 was charged entirely to the Land account instead of being allocated between Land ($62,200) and Building ($205,000). The building should be of use to us for a total of 20 years. At that point, it'll be sold and we should be able to realize at least $47,000 from the sale of the building." "Please let me know how these…
16. Helen Company's directors decided on November 1, 2011 to restructure the entity's operations as follows: Factory A would be closed down and put on the market for sale. Employees working in Factory A would be retrenched on November 3O, 2011, and would be paid their accumulated entitlements plus six months' wages. Some employees working in Factory A would be transferred to Factory B, which would continue operating. On December 31, 2011, the following transactions and events had occurred: The retrenched employees have left and their accumulated entitlements have been paid. However, an amount of P1,000,000, representing a portion of the six months' wages for the retrenched employees, has still not been paid. Costs of P300,000 are expected to be incurred in transferring the remaining employees to their new work in Factory B. The transfer is planned for January 15, 2012. One employee, Juan Cruz, remains in order to complete administrative tasks relating to the closure of Factory A and…
As an analyst for a big technology company. The company has decided that this is the time to retire some of its debt. The company has decided the best way to do this is if us government bonds are used to match the principle as well as the interest payments on the liabilities chosen. Set up a strategy to accomplish this showing your work and discussion your result. do you think this process is reasonable and why/whynot? September 2019 $4,500,000 September 2020. $5,050,000 September 2021. $3,750,000 September 2022 $6,450,000 The Government debt 1.50% coupon due September 2019 1.75% coupon due September 2020 2.35% coupon due September 2020 2.6% coupon due September 2021
3
A6)
Note:- from the student who needs the answer of the question. Please dear Expert I think the date is not accurate so please you can change the date to whatever you what just make suggestions about the date. that will not make any problems. thank you
Northwestern Ocean Lapidary Inc. has been in business since 2015. However, during the 2020 pandemic, the company suffered a large net operating loss. See below. Despite a bad 2020, the company expect to turn a profit in 2021 and in subsequent years. Below you will see the actual taxable income from 2018 to 2021. You will also see the company's expected taxable income from 2022 to 2025. Under current tax laws the company was unable to carry back the NOL in 2020. However, the company applied the NOL CF to offset all taxable income in 2021. Taxable Income 2018 2$ 144,000 2019 $ 252,000 2020 $ (876,000) 2021 $ 72,000 2022* 2$ 204,000 2023* $ 264,000 2024* $ 312,000 2025* 2$ 420,000 *Expected Existing and future enacted tax rates are as follows: 21% in 2018 to 2021, 25% in 2022 and 2023, 28% in 2024, and 32% in 2025 and all years thereafter. What is the DTA the company will report on its 2021 balance sheet that corresponds to the NOL Carry Foward? 227,160 353,880 212,040 212,040 None of the…
Crane Corp.'s controller was preparing the adjusting entries for the company's year ended December 31, 2023, when the vice- president of finance called him into her office. "Jean-Pierre," she said, "I've been considering a couple of matters that may require different treatment this year. First, the patent we acquired in early January 2021 for $585,000 will now likely be used until the end of 2025 and then be sold for $200,000. We previously thought that we'd use it for 10 years in total and then be able to sell it for $133,000. We've been using straight-line amortization on the patent." "Second, I just discovered that the property we bought on July 2, 2020, for $267,200 was charged entirely to the Land account instead of being allocated between Land ($63,200) and Building ($204,000). The building should be of use to us for a total of 20 years. At that point, it'll be sold and we should be able to realize at least $48,800 from the sale of the building." "Please let me know how these…
You have been asked to review the December 31, 2024, balance sheet for Champion Cleaning. After completing your review, you list the following three items for discussion with your superior: An investment of $30,000 is included in current assets. Management has indicated it has no intention of liquidating the investment in 2025. A $100,000 note payable is listed as a long-term liability, but you have determined that the note is due in 10 equal annual installments with the first installment due on March 31, 2025. Deferred revenue of $60,000 is included as a current liability even though only two-thirds will be recognized as revenue in 2025, and the other one-third in 2026.