South-Western Federal Taxation 2019: Individual Income Taxes (Intuit ProConnect Tax Online 2017 & RIA Checkpoint 1 term (6 months) Printed Access Card)
42nd Edition
ISBN: 9781337702546
Author: James C. Young, William H. Hoffman, William A. Raabe, David M. Maloney, Annette Nellen
Publisher: Cengage Learning
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Chapter 5, Problem 57P
a.
To determine
Determine the tax consequences to V in the given scenario.
b.
To determine
Determine the tax consequences to V in the given scenario.
c.
To determine
Determine the tax consequences to V in the given scenario.
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On July 1, 2017, Dinar obtained a contract to construct a building. The building was estimated to be built at a total cost of P15,000,000 and is scheduled for completion on October 2019. The contract contains a penalty clause to the effect that the other party was to deduct P35,000 from the contract price for each week of delay. On the other hand, if the contractor was able to finish the building earlier than agreed, it will be rewarded an amount equal to P50,000 for every month of early completion. Furthermore, cost escalation clause was included in the contract. In 2018, the estimated costs of particular construction material amounting to P520,000 were bought for P780,000. The increase in the contract price related to this cost escalation was approved by the client. Completion was delayed for 4 weeks. The records show:
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Curtiss Construction Company, Inc., entered into a fixed-price contract with Axelrod Associates on July 1, 2018,to construct a four-story office building. At that time, Curtiss estimated that it would take between two and threeyears to complete the project. The total contract price for construction of the building is $4,000,000. Curtissconcludes that the contract does not qualify for revenue recognition over time. The building was completed onDecember 31, 2020. Estimated percentage of completion, accumulated contract costs incurred, estimated costs tocomplete the contract, and accumulated billings to Axelrod under the contract were as follows:At 12-31-2018 At 12-31-2019 At 12-31-2020Percentage of completion 10% 60% 100%Costs incurred to date $ 350,000 $2,500,000 $4,250,000Estimated costs to complete 3,150,000 1,700,000 –0–Billings to Axelrod, to date 720,000 2,170,000 3,600,000Required:1. For each of the three years, prepare a schedule to compute total gross profit or loss to be…
Your answer is partially correct.
During 2023, Darwin Corporation started a construction job with a contract price of $4.20 million. Darwin ran into severe technical
difficulties during construction but managed to complete the job in 2025. The contract is non-cancellable. Under the terms of the
contract, Darwin sends billings as revenues are earned. Billings are non-refundable. The following information is available:
Costs incurred to date
2023
Estimated costs to complete 3,150,000
Gross profit/(loss)
2024
$600,000 $2,100,000 $4,100,000
2023
2,100,000
2025
Calculate the amount of gross profit or loss that should be recognized each year under the zero-profit method. (Enter negative amounts
using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Do not leave any answer field blank. Enter O for amounts.)
72000 $
-0-
2024
-72000
2025
100000
Chapter 5 Solutions
South-Western Federal Taxation 2019: Individual Income Taxes (Intuit ProConnect Tax Online 2017 & RIA Checkpoint 1 term (6 months) Printed Access Card)
Ch. 5 - Prob. 1DQCh. 5 - Prob. 2DQCh. 5 - Prob. 3DQCh. 5 - Prob. 4DQCh. 5 - Prob. 5DQCh. 5 - Prob. 6DQCh. 5 - Prob. 7DQCh. 5 - Holly was injured while working in a factory and...Ch. 5 - Prob. 9DQCh. 5 - Prob. 10DQ
Ch. 5 - Ted works for Azure Motors, an automobile...Ch. 5 - Prob. 12DQCh. 5 - Eagle Life Insurance Company pays its employees...Ch. 5 - Several of Egret Companys employees have asked the...Ch. 5 - Prob. 15DQCh. 5 - Tammy, a resident of Virginia, is considering...Ch. 5 - Andrea entered into a 529 qualified tuition...Ch. 5 - Prob. 18DQCh. 5 - Prob. 19DQCh. 5 - Prob. 20CECh. 5 - Prob. 21CECh. 5 - Ellie purchases an insurance policy on her life...Ch. 5 - Prob. 23CECh. 5 - Leland pays premiums of 5,000 for an insurance...Ch. 5 - Jarrod receives a scholarship of 18,500 from...Ch. 5 - Prob. 26CECh. 5 - Prob. 27PCh. 5 - Prob. 28PCh. 5 - Prob. 29PCh. 5 - Prob. 30PCh. 5 - Prob. 31PCh. 5 - Prob. 32PCh. 5 - Prob. 33PCh. 5 - Prob. 34PCh. 5 - LO.2 Leigh sued an overzealous bill collector and...Ch. 5 - LO.2 Determine the effect on gross income in each...Ch. 5 - Prob. 37PCh. 5 - Prob. 38PCh. 5 - Prob. 39PCh. 5 - Prob. 40PCh. 5 - Prob. 41PCh. 5 - LO.2 Does the taxpayer recognize gross income in...Ch. 5 - Prob. 43PCh. 5 - Prob. 44PCh. 5 - Prob. 45PCh. 5 - LO.2, 5 Rosas employer has instituted a flexible...Ch. 5 - Prob. 47PCh. 5 - Prob. 48PCh. 5 - Prob. 49PCh. 5 - Prob. 50PCh. 5 - Prob. 51PCh. 5 - Prob. 52PCh. 5 - Prob. 53PCh. 5 - Prob. 54PCh. 5 - Prob. 55PCh. 5 - Prob. 56PCh. 5 - Prob. 57PCh. 5 - Prob. 59CPCh. 5 - Prob. 1RPCh. 5 - Prob. 2RPCh. 5 - Prob. 3RPCh. 5 - Prob. 4RPCh. 5 - Prob. 1CPACh. 5 - Linda is an employee of JRH Corporation. Which of...Ch. 5 - Kim was seriously injured at her job. As a result...Ch. 5 - Danny received the following interest and dividend...Ch. 5 - Prob. 5CPA
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