The company also needed to acquire a series of parts to hold as stock on hand. At the end of the year the company had closing stock of $146,000. Of this figure the directors believed that $85,000 represented obsolete stock and wished to write off this amount. The financial accountant had not done this in deriving the profit of $750,000 as he was unsure of how to account for it in the financial accounts. The obsolete stock had been scrapped at the end of the year and taken to a metal recycler.            The company directors come to you as the taxation adviser of the company and wish to know how each of the items mentioned above are to be treated for taxation purposes

6. Using the information in #5 above, what are the first two years of depreciation using double declining depreciation? 7. Write the entry if a company issues 50,000 shares of its $1 par value common stock for $45 per share. 8. A company buys 20,000 shares of its own stock for $35 per share. Write the entry to record this transaction. 9. The company in #8 above decides to sell all of the shares it purchased (20,000). They sell the shares for $42 per share. Write the entry to record this transaction. 10. A company declares a 10% stock dividend when its $1 par value common shares are selling for $62 per share. The company has 400 million authorized shares; 1,456,000 issued shares; and 1,200,000 outstanding shares. Write the entry to record the stock dividend. 11. A company issues 10,000 shares of its 5% $20 callable preferred stock for $58 per share. Write the entry to record this transaction.

Larry has been the chief financial officer (CFO) of Maxima Auto Service for the past 10 years. The company has reported profits each year it’s been in business. However, this year has been a tough one. Increased competition and the rising costs of labor have reduced the company’s profits. On December 30, Larry informs Robert, the company’s president and Larry’s closest friend for the past 10 years, that it looks like the company will report a net loss (total expenses will be greater than total revenues) of about $50,000 this year. The next day, December 31, while Larry is preparing the year-end reports, Robert stops by Larry’s office to tell him that an additional $75,000 of revenues needs to be reported and that the company can now report a profit. When Larry asks about the source of the $75,000, Robert tells him, “Earlier in the month some customers paid for auto services with cash, and with this cash I bought additional assets for the company. That’s why the $75,000 never showed up…

Shi Company is going through a Chapter 7 bankruptcy. All assets have been liquidated, and the company retains only $27,500 in free cash. The following debts, totaling $49,550, remain: Government claims to unpaid taxes $ 8,300 Salary during last month owed to Mr. Key (not an officer) 20,125 Administrative expenses 4,750 Salary during last month owed to Ms. Rankin (not an officer) 5,960 Unsecured accounts payable 8,850 Required: Indicate how much money will be paid to the creditor associated with each debt.

Accounting Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Do not provide Excel Screet shot rather use tool table Answer completely.

Blackfly Ltd. had no outstanding current liabilities at the start of year 2007. During the year, the company paid $300,000 for direct labour. At the end of the year the company still owed a $2.000 performance bonus to one employee, and $33,000 to another employee. The amount the company would report as labour expense for 2007 is $325,000 $302.000 none of the listed answers are correct $300,000 $298,000 5