Indicate the accounts that might need to be adjusted before an accurate set of finan- cial statements can be prepared. c. Why did the loan officer ask your brother whether he used the accrual basis of accounting for revenues and expenses? Why would it have been important to use this method?

Larry purchased an annuity from an insurance company that promises to pay him $9,000 per month for the rest of his life. Larry paid $946,080 for the annuity. Larry is in good health, and he is 72 years old. Larry received the first annuity payment of $9,000 this month. Use the expected number of payments in Exhibit 5-1 for this problem. a. How much of the first payment should Larry include in gross income? b. If Larry lives more than 15 years after purchasing the annuity, how much of each additional payment should he include in gross income? c. What are the tax consequences if Larry dies just after he receives the 100th payment?

Mr. Madoff decides to form an animal shelter for dogs and cats. On May 1, (the Happiest day in my mom's life), he made the following transactions: 1. On 5/1, he invested $350,000.00 of his own funds to form Redemption Services, LLC. He also borrows $100,000.00 from Chase Bank and he deposits the cash into the business. He deposits all of the funds into the First Redemption Bank. 2. On 5/1, he paid $9,600.00 for insurance for 12 months. 3. On 5/1, he paid $21,000 for a security system on Account. The equipment has a 3-year useful life and a salvage value of $3,000.00. In addition, it costs $500.00 per month for the monitoring service. 4. On 5/2, he paid $3,000.00 for rent for the month. 5. On 5/3, he paid $1,500.00 for dog and cat food. 6. On 5/5, he bought $2,450.00 of pet supplies on Account. 7. On 5/10, he transfers $75,000.00 to Pope Francis Bank. 8. On 5/12, he transfers $1,000.00 to form a petty cash account. 9. On 5/14, he paid out $2,500.00 in wages to his employees. Employees…

David and Rita Richardson saved all their married life to open a homestay named T-Lights. They invested RM100,000 of their own money and the corporation issued common stock to them. The business then got a RM100,000 bank loan for the RM200,000 needed to get started. The corporation bought a run-down old colonial home in Ipoh for RM80,000. It cost another RM50,000 to renovate. They found most of the furniture at antique shops and flea markets – total cost was RM20,000. Kitchen equipment cost RM10,000, and a Dell computer set cost RM2,000.   Prior to the grand opening, the banker requests a report on their activities thus far. T-Lights’ bank statement shows a cash balance of RM38,000. They feel pretty good with that much net income in only six months. To better understand how well they are doing, they prepare the following statement for presentation to the bank:   T-Lights Income Statement Six Months Ended 30 June 2020 Revenues: Investment by owner Bank loan   RM100,000 100,000…

Bruce is considering the purchase of a restaurant named Hard Rock Hollywood. The restaurant is listed for sale at $1,030,000. With the help of his accountant, Bruce projects the net cash flows (cash inflows less cash outflows) from the restaurant to be the following amounts over the next 10 years:     Years Amount   1-6 $ 83,000   (each year) 7   93,000     8   103,000     9   113,000     10   123,000         Bruce expects to sell the restaurant after 10 years for an estimated $1,130,000. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Round your answer to 2 decimal places.)Required:1-a. Calculate the total present value of the net cash flows if Bruce wants to make at least 10% annually on his investment. (Assume all cash flows occur at the end of each year.)       1-b. Should he purchase the restaurant?