1. In what significant ways do the FASB standards differ from those of the GASB with respect to the Statement of Cash Flows? 2. For the following situation, indicate whether the organization should recognize the described contributed services as revenue (offset by a corresponding expense). Briefly justify your response or
Avatar Company was formed on January 1, 2007, and began constructing a new plant. At the end of 2007, its auditor discovered that all expenditures involving long-term assets had been debited to an account called Fixed Assets An analysis of the Fixed Assets account, which had a year-end balance of $2,644,972, disclosed that it co
Identify the tax issue or issues suggested by the following situations and state issue in the form of a question.(need three questions) Ellie has operated a sole proprietorship for six years during which net profit has been stable and Ellie's marginal tax rate has been a constant 25 percent. Ellie's projects that her profit
Ms. Z is a cash basis taxpayer who owns and operates a clothing store as a sole proprietor. She wishes to retire after holding a liquidation sale. She would like to avoid ordinary income from the sale of the inventory. Ms. Z shuts her store for one month and then begins the sale. She then suggests to her tax preparer that he
Suppose that Congress recently amended the tax law to provide for a maximum 12% rate on interest income from U.S. savings bonds. Compute the tax savings from this preferential rate for: a. Ms. E., who has a 15% marginal rate on ordinary income and earned $290 interest on her investment in U.S. savings bonds. b. Mr. K., wh
Please show all calculations. Gregly Company, which has a 33% marginal tax rate, plans to make an investment that should generate $300,000 annual cash flow/ordinary income. Instead of making the investment directly, Gregly could form a new taxable entity (L'il Greg) to make the investment. L'il Greg's marginal tax rate on
Please help with the following accounting problem. Provide at least 200 words in the solution. Mr. C comes to you for tax planning advice. He is considering an investment, but does not know whether to use his average (average tax rate 8%)or his marginal rate (marginal tax rate 10%) in the analysis. Advise Mr. C on this issue
1. Sir Ariel, a star college basketball player, received a contract from the Western Timberlines to play professional basketball. The contract calls for a salary of $300,000 a year for four years, dependent on his making the team in each of those years. Should his contract be considered a liability and recorded on the books of t
1. What accounting rule is violated by the direct charge-off method of recognizing noncollectable accounts? Why? 2. In what ways is Allowance for Noncollectable Accounts similar to Accumulated Depreciation? In what ways is it different? 3. Under what circumstances would an accrual of interest income on an interest-bearing
1. Break-Even Analysis The Beach Street office of Getwell Clinics specializes in the treatment of three types of patients: DRG M, DRG J, and DRG P. The operating statistics for patient care of these three DRGs for last year are shown below. They include patient volume proportions, average charges, average variable costs, and
Harangue Company is a large retail furniture company which operates in two adjacent warehouses. One of the warehouses is a showroom, and the other is used to store merchandise. On the Night of April 20, 2007, a fire broke out in the storage warehouse and destroyed the merchandise stored there. Fortunately, the fore did not reach
Chiappetta, Larson, Wild, Fundamental Accounting Principles, 18th Ed., McGraw-Hill 2007, Original work published 1976). (Wild, 2007) Discuss how accrual accounting enhances the usefulness of financial statements.
Recognition of asset impairment is an accounting mandate that is alleged to improve the relevance and reliability of financial information. Required: Discuss the valuation relevance of asset impairment recognition. (Cite related research).
Boating, Inc., assembles custom sailboats from components supplied by various manufacturers. The company is very small and its assembly shop and retail sales store are housed in a boathouse in Charleston SC. Below are listed some of the costs that are incurred at the company. For each cost, indicate whether it would most like
1. Geoff's Golf Clubs is considering purchasing a small firm in the same line of business. The purchase would be financed by the sale of common stock or a bond issue. The financial manager needs to evaluate how the two alternative financing plans will affect the earnings potential of the firm. Total financing required is $4.5 mi
I have to choose two publicly traded companies and compute liquidity ratios and solvency ratios. I have chosen Dell and HP as my companies and the financial information for the FY2008 has been attached for each company. The list below is what I have to derive from the information. Compute the following liquidity ratios for
Please help with the following problem. The following unit data were assembled for the heating process of Morgan Processing, Inc., for the month of August. Direct materials are added at the beginning of the process. Conversion costs are added uniformly over the production process. The company uses the FIFO process costing me
I need some guidance with this sample quiz so I know which chapters to study further. Thanks! Certain U.S. accounting standards have been, and will be, amended to aid in the international convergence process. The process of changing these standards usually involves a short deliberation followed by a vote of the U
Since the club opened, a major concern has been the pool facilities. Although the existing pool is adequate, Mindy, Oscar, and Lori all desire to make LifePath a cutting-edge facility. Until the end of 2008, financing concerns prevented this improvement. However, because there has been steady growth in clientele, revenue, and in
Sam sells land with an adjusted basis of $35,000 and a fair market value of $50,000 to Cynthia, his wife, for $50,000. Discuss how the tax consequences would differ if Sam and Cynthia had never been married.
Louis owns a condominium in New Orleans which has been his principal residence for 12 years. He wants to be near Lake Ponchartrain since he enjoys water activities. Therefore, he sells the condominium. His original intent was to purchase a house in New Orleans near the lake. However, the cost of such properties far exceeded his
Identify an AMT adjustment that applies for the individual taxpayer that does not apply for the corporate taxpayer and Identify an AMT adjustment that applies for the corporate taxpayer that does not apply for the individual taxpayer.
Due to substantial medical expenses, Quincy is delinquent by $11,000 in paying the property taxes on his home. To avoid an adverse effect on his credit rating, Quincy's mother, Gwen, offers to pay the property taxes. What are the tax consequences to Quincy and to Gwen: a. If she makes the payment? b. If she gives the $11,
DeWayne is a U.S. citizen and resident. He spends much of each year in the United Kingdom on business. He is married to Petula, a U.K. citizen and resident of London. DeWayne has heard that it is possible that he can file a joint income tax return for U.S. purposes. If this is so, what are the constraints he should consider
Jessica inherits land from her uncle. His adjusted basis in the land (purchased in 1997) was $60,000 and it was included in his estate at a value of $150,000. a. Determine Jessica's basis and holding period for the land. b. Determine Jessica's basis and holding period for the land if it was included in her uncle's estate a
Eunice Jean exchanges land held for investment located in Rolla, Missouri, for land to be held for investment located near Madrid, Spain. Her basis for the land given up is $250,000 and the fair market value of the land received is $350,000. Eunice Jean also receives cash of $15,000. a. What is Eunice Jean's recognized gain?
Ed and Cheryl have been married for 27 years. They own land jointly with a basis of $140,000. Ed dies in 2008, when the fair market value of the land is $220,000. Under the joint ownership arrangement, the land passed to Cheryl. a. If Ed and Cheryl reside in a community property state, what is Cheryl's basis in the land? b
Mel gives a parcel of land to his son, Scott. He had purchased the land in 1996 for $140,000 and its fair market value on the date of the gift is $125,000. No gift tax is paid. Scott subsequently sells the land for $131,000. a. What is Scott's basis for the land? b. What is Scott's realized and recognized gain or loss from
45. Prepare a flexible budget for 8,000, 9,000, and 10,000 units of output, given the following data: Variable costs: Budgeted fixed overhead $90,000 Direct materials $5 Direct labor 4 Overhead 8 Ans: Flexible Budget Variable Cost Units Produced Category per Unit Variable costs:
Please see the attached file. 40. The graph below depicts two different types of costs. Questions related to the graph should be answered in the spaces provided. a. The line H-B represents what type of cost? Variable cost b. Production at point J versus point L would increase total variable costs. Variable costs wil