This year, Amber purchased a business that processes and packages landscape mulch. Approximately 20% of administration time, space, and expense are spent on the manufacturing process. At the end of the year, Amber's accountant indicated that the business had processed 10 million bags of mulch, but only 1 million bags remained in the ending inventory. a. What is Amber's tax basis in her ending inventory if the UNICAP rules are used to allocate indirect costs to inventory? (Assume direct costs are allocated to inventory according to the level of ending inventory. In contrast, indirect costs are first allocated by time spent and then according to level of ending inventory.) Note: Leave no answers blank. Enter zero if applicable. Material: Mulch and packaging Material: Administrative supplies Salaries: Factory labor Salaries: Sales & advertising Salaries: Administration Property taxes Factory Property taxes: Offices Depreciation Factory Depreciation: Offices Total Inventory Costs $ Costs 660,000 27,500 1,250,000 530,000 760,000 625,000 510,000 815,000 240,000 Tax Inventory

This year, Amber purchased a business that processes and packages landscape mulch. Approximately 20% of administration time, space, and expense are spent on the manufacturing process. At the end of the year, Amber's accountant indicated that the business had processed 10 million bags of mulch, but only 1 million bags remained in the ending inventory. a. What is Amber's tax basis in her ending inventory if the UNICAP rules are used to allocate indirect costs to inventory? (Assume direct costs are allocated to inventory according to the level of ending inventory. In contrast, indirect costs are first allocated by time spent and then according to level of ending inventory.) Note: Leave no answers blank. Enter zero if applicable. Material: Mulch and packaging Material: Administrative supplies Salaries: Factory labor Salaries: Sales & advertising Salaries: Administration Property taxes Factory Property taxes: Offices Depreciation Factory Depreciation: Offices Total Inventory Costs $ Costs 660,000 27,500 1,250,000 530,000 760,000 625,000 510,000 815,000 240,000 Tax Inventory

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter16: Accounting Periods And Methods

Section: Chapter Questions

Problem 33P

See similar textbooks

Similar questions

This year, Amber purchased a business that processes and packages landscape mulch. Approximately 20 percent of management time, space, and expenses are spent on this manufacturing process. At the end of the year, Amber's accountant indicated that the business had processed 10 million bags of mulch, but only 1 million bags remained in the ending inventory. a. What is Amber's tax basis in her ending inventory if the UNICAP rules are used to allocate indirect costs to inventory? (Assume direct costs are allocated to inventory according to the level of ending inventory. In contrast, indirect costs are first allocated by time spent and then according to level of ending inventory.) Note: Leave no answers blank. Enter zero if applicable. Material: Mulch and packaging Material: Administrative supplies Salaries: Factory labor Salaries: Sales and advertising Salaries: Administration Property taxes: Factory Property taxes: Offices Depreciation: Factory Depreciation: Offices Total Inventory Costs…
This year, Amber purchased a business that processes and packages landscape mulch. Approximately 20 percent of management time, space, and expenses are spent on this manufacturing process. At the end of the year, Amber's accountant indicated that the business had processed 10 million bags of mulch, but only 1 million bags remained in the ending inventory. What is Amber's tax basis in her ending inventory if the UNICAP rules are used to allocate indirect costs to inventory? (Assume direct costs are allocated to inventory according to the level of ending inventory. In contrast, indirect costs are first allocated by time spent and then according to level of ending inventory.) (Leave no answers blank. Enter zero if applicable.) Material: Mulch and packaging Material: Administrative supplies Salaries: Factory labor Salaries: Sales & advertising Salaries: Administration Property taxes: Factory Property taxes: Offices Depreciation: Factory Depreciation: Offices Total Inventory Costs $ Costs…
This year, Amber purchased a business that processes and packages landscape mulch. Approximately 20 percent of management time, space, and expenses are spent on this manufacturing process. At the end of the year, Amber's accountant indicated that the business had processed 10 million bags of mulch, but only 1 million bags remained in the ending inventory What is Amber's tax basis in her ending inventory if the UNICAP rules are used to allocate indirect costs to inventory? (Assume direct costs are allocated to inventory according to the level of ending inventory. In contrast, indirect costs are first allocated by time spent and then according to level of ending inventory.) (Leave no answers blank. Enter zero if applicable.) Costs Tax Inventory Material: Mulch and packaging 710,000 Material: Administrative supplies 66,500 Salaries: Factory labor 1.360,000 430.000 Salaries: Sales & advertising Salaries: Administration 750,000 945,000 450,000 995,000 360,000 Property taxes: Factory…
Ferran operates a boutique yarn store from their own. The store had accountingincome after tax of $50,000. Already deducted from that number are depreciation of$5,000, financing fees of $2,500, and salaries to arm's length employees of $10,000.CCA would be $4,000.Calculate Ferran's taxable income based on what you know about them?
Lisa Manoban, operates a pet shop at the same time, offers interior design services to her clients. The following data were provided by Lisa for the 2018 taxable year. Pet Shop GROSS SALES 1,800,000 COST OF SALES 600,000 OPERATING EXPENSES 200,000 Interior design services GROSS SALES 1,150,000 COST OF SALES 120,000 OPERATING EXPENSES 80,000 How much is her income tax provided she opted to use the graduate rate?
Torrey owns a retail store, and during the current year purchased $580,000 worth of inventory. Torrey's beginning inventory was $60,000, and ending inventory is $80,000. During the year, Torrey withdrew $1,000 in inventory for personal use. Assume that he uses the cost method to value the inventory and there was no change in determining quantities, costs, or valuations between opening and closing inventory. Use Part III of Schedule C from Appendix F to calculate Torrey's cost of goods sold for the year. Enter amounts as positive numbers. Part III Cost of Goods Sold (see instructions) 33 Method(s) used to value closing inventory: Was there any change in determining quantities, costs, or valuations between opening and closing inventory? If "Yes," attach explanation. 35 Inventory at beginning of year. If different from last year's closing inventory, attach explanation 36 Purchases less cost of items withdrawn for personal use 37 Cost of labor. Do not include any amounts paid to yourself…
Seved Help Ms. T. Potts, the treasurer of Ideal China, has a problem. The company has just ordered a new kiln for $560,000. Of this sum, $70,000 Is described by the supplier as an installation cost. Ms. Potts does not know whether the Internal Revenue Service (IRS) will permit the company to treat this cost as a tax-deductible current expense or as a capital investment. In the latter case, the company could depreciate the $70,000 straight-line over 5 years. The tax rate is 30% and the opportunity cost of capital is 5%. a. What is the present value of the cost of the kiln if the installation cost is treated as a separate current expense? b. What is the present value of the cost of the kiln if the installation cost is treated as a part of the capital investment? (Round your answer to the nearest whole dollar amount.) a. Present value b. Present value
Ms. T. Potts, the treasurer of Ideal China, has a problem. The company has just ordered a new kiln for $496,000. Of this sum, $62,000 is described by the supplier as an installation cost. Ms. Potts does not know whether the Internal Revenue Service (IRS) will permit the company to treat this cost as a tax-deductible current expense or as a capital investment. In the latter case, the company could depreciate the $62,000 straight-line over 5 years. The tax rate is 30% and the opportunity cost of capital is 5%. a. What is the present value of the cost of the kiln if the installation cost is treated as a separate current expense?b. What is the present value of the cost of the kiln if the installation cost is treated as a part of the capital investment? (Round your answer to the nearest whole dollar amount.)
Kevin owns a retail store, and during the current year he purchased $934,000 worth of inventory. Kevin's beginning inventory was $93,400, and his ending inventory is $112,080. During the year, Kevin withdrew $18,680 in inventory for his personal use. Assume that he uses the cost method to value the inventory and there was no change in determining quantities, costs, or valuations between opening and closing inventory. Use Part III of Schedule C below to calculate Kevin's cost of goods sold for the year. Enter all amounts as positive numbers. Part III Cost of Goods Sold (see instructions) 33 Method(s) used to value closing inventory: Cost 34 Was there any change in determining quantities, costs, or valuations between opening and closing inventory? If "Yes," attach explanation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . No 35 Inventory at beginning of year. If different from last year's closing inventory, attach…
Ms. T. Potts, the treasurer of Ideal China, has a problem. The company has just ordered a new kiln for $656,000. Of this sum, $82,000 is described by the supplier as an installation cost. Ms. Potts does not know whether the Internal Revenue Service (IRS) will permit the company to treat this cost as a tax-deductible current expense or as a capital investment. In the latter case, the company could depreciate the $82,000 straight-line over 5 years. The tax rate is 30% and the opportunity cost of capital is 5%. a. What is the present value of the cost of the kiln if the installation cost is treated as a separate current expense?b. What is the present value of the cost of the kiln if the installation cost is treated as a part of the capital investment?
Ms. T. Potts, the treasurer of Ideal China, has a problem. The company has just ordered a new kiln for $416,000. Of this sum, $52,000 is described by the supplier as an installation cost. Ms. Potts does not know whether the Internal Revenue Service (IRS) will permit the company to treat this cost as a tax-deductible current expense or as a capital investment. In the latter case, the company could depreciate the $52,000 straight-line over 5 years. The tax rate is 30% and the opportunity cost of capital is 5%. a. What is the present value of the cost of the kiln if the installation cost is treated as a separate current expense? b. What is the present value of the cost of the kiln if the installation cost is treated as a part of the capital investment? (Round your answer to the nearest whole dollar amount.) a. Present value b. Present value
Bob is a farmer and is required to use the accrual method. At the beginning of the year, Bob has inventory, including livestock held for resale, amounting to $10,000. During the year, Bob purchased livestock totaling $3,000. Bob’s ending inventory was $4,000. Bob’snet sales for the year totaled $17,000. What is Bob’s gross profit for the current year?a. $9,000b. $17,000c. $8,000d. $13,000