Explain how realized and recognized gain or loss for a personal-used asset is assessed. Mike owns a car that he uses exclusively for personal purpose. Its original cost was $26,000, and the fair market value is $12,000. He exchanges the car and $18,000 cash for a new car. a. Calculate his realized and recognized gain or l
Sarah owns undeveloped land (basis of $350K) held as an investment. On October 7, 2006, she exchanges the land with her 27-year-old daughter, Ellen for other undeveloped land also to be held as an investment. The appraised value of Ellen's land is $500K. a. On February 15, 2007, Sarah sells the land to Jeff, a real estate
1. Rocky Industries received its telephone bill in the amount of $300, and immediately paid it. Rocky's general journal entry to record this transaction will include a A. Debit to Telephone expense for $300 B. Credit to Accounts Payable for $300. C. Debit to Cash for $300 D. Credit to Telephone Expense for $300 E. Debit
Practically every line of Kevin and Janet's form 1040 can be used for tax planning. They had total income of $98,771 and paid federal income tax of $6,838 or 7%. Additionally, Kevin had income from his business of $48,040 and paid self-employment tax of $7,001 or 15%. Explain how Kevin and Janet took advantage of existing IR
Sarah sells short 100 shares of A stock at $20 per share on January 15, 2006. She buys 200 shares of A stock on April 1, 2006, at $25 per share. On May 2, 2006, she closes the short sale by delivering 100 of the shares purchased on April 1. a. What are the amount and nature of Sarah's loss upon closing the short sale? b. Whe
I Part: 2) Revenue Recognize: The revenue recognition principle provides that revenue is recognized when: 1- It is realized, 2- It is earned. Explain when revenues are a realized , b) realizable, and c) earned. II Part: Neasha Corporation reported the following results for its first three years of operation:
Variable and absorption costing, explaining operating-income differences: Nascar Motors assembles and sells motor vehicles and uses standard costing. Actual data relating to April and May 2006 are: The selling price per vehicle is $24,000. The budgeted level of production used to calculate the budgeted fixed manufacturing c
Dividends and Taxes: Investors require an after-tax rate of return of 10 percent on their stock investments. Assume that the tax rate on dividends is 30 percent while capital gains escape taxation. A firm will pay a $2 per share dividend 1 year from now, after which it is expected to sell at a price of $20. a. Find the c
Cabigas Company manufactures two products, Product C and Product D. The company estimated it would incur $167,140 in manufacturing overhead costs during the current period. Overhead currently is applied to the products on the basis of direct labor hours. Data concerning the current period's operations appear below:
The most recent monthly income statement for Kennaman Stores is given below: Total Store I Store II Sales $2,000,000 $1,200,000 $800,000 Less variable expenses
During 2006, Edgemont Corporation had revenues of $230,000 and expenses, including income taxes, of $190,000. On December 31, 2005, Edgemont had assets of $350,000, Liabilities of $80,000, and Capital Stock of $210,000. Edgemont paid a cash dividend of $25,000 in 2006. No additional Stock was issued. Compute the retained earning
Lock Boxes. Anne Teak, the financial manager of a furniture manufacturer, is considering operating a lock-box system. She forecasts that 400 payments a day will be made to lock boxes with an average payment size of $2,000. The bank's charge for operating the lock boxes is $.40 a check. The interest rate is .015 percent per day.
You are asked to make a depreciation schedule for a business asset. A depreciation schedule shows the remaining value of the asset at the end of each time period. Scenario B: A $26,000 company car is expected to be driven for 120,000 miles and then salvaged for $3,500. Find the unit depreciation using the units-of-production
Mervyn's Fine Fashions has an average collection period of 40 days. The accounts receivable balance is $80,000. What is the value of its credit sales?
My wife comes to me with the following tax saving strategies: Computer Consulting received $7900 from customers in the last week of December. Can she just hold on to the money and include it in January 2005 receipts? She would like to purchase a car in the name of Computer Consulting. What are his options? She would like
Using the Du Pont method, evaluate the effects of the following relationships for the Lollar Corporation. Lollar Corporation has a profit margin of 5 percent and its return on assets (investment) is 13.5 percent. What is its asset turnover ratio? If the Lollar Corporation has a debt-to-total-assets ratio of 60 percent, wha
1) As regulations are promulgated, must they always fit within the conceptual framework? Why or why not? 2) What value is there to the various publications in Level Five of the hierarchy? Do they even matter? In what context will they be useful, if any?
1. As marginal tax rates increase, the after-tax cost of a non-deductible expense will A. Increase B. Decrease C. Stay the same 2. A taxable corporation faces a flat 35% marginal tax rate. What is the tax savings from an additional $100,000 deduction? A. $35,000 B. $100,000 C. -0- D. $65,000 3. A taxpayer who th
Selected transactions for H. Burns, Inc., an interior decorating firm, in its first month of business, are as follows. Jan. 2: Invested $15,000 cash in business in exchange for common stock. 3: Purchased used car for $4,000 cash for use in business. 9: Purchased supplies on account for $500. 11: Billed customers $1,800 for
The estimated total factory overhead cost and total machine hours for Department 40 for the current year are $225,000 and 56,250 respectively. During January, the first month of the current year, actual machine hours used totaled 5,100 and factory overhead cost incurred totaled $19,800. (a) Determine the factory overhead rat
For the coming year, Swain Company estimates fixed costs at $90,000, the unit variable cost at $20, and the unit selling price at $80. Determine (a) the break-even point in units of sales, (b) the unit sales required to realize operating income of $150,000, and (c) the probable operating income if sales total $500,000.
Addison Manufacturing holds a large portfolio of debt and equity securities as an investment. The fair value of the portfolio is greater than its original cost, even through some securities have decreased in value. Ted Abernathy, the financial vice president, and Donna Nottebart, the controller, are near year-end in the proces
Database Systems is considering expansion into a new product line. Assets to support expansion will cost $500,000. It is estimated that Database can generate $1,200,000 in annual sales, with a 6 percent profit margin. What would net income and return on assets (investment) be for the year?
Knowing AFC's strategy to double its sales in the next two years, the president has asked you to research companies that have accomplished this or want to accomplish this. The research should include the following: example companies strategies to implement potential risks Based on your findings, what relevant informa
How do the at-risk rules and passive loss rules can affect a tax return? How is a gain on line 17 of form 1040 can be calculated?
See attached file for full problem description. 1. Which costs are irrelevant? 2. Which alternative should Paul choose? Support your decision with only relevant numbers. Paul Smith is considering replacing Jones & Smith's present dishwasher with a new energy-efficient model. Although the old dishwasher has a presen
See attached file for full problem description. 1. Using the high/ low two-point method, determine the variable cost per customer. 2. What is the monthly fixed labor cost at Jim's Place? 3. What is your estimate of total labor costs if 3900 customers are served during the month?
The balance in Iwig Co.'s accounts payable account at December 31, 2004 was $400,000 before any necessary year-end adjustments relating to the following: Goods were in transit to Iwig from a vendor on December 31, 2004. The invoice cost was $50,000. The goods were shipped f.o.b. shipping point on December 29, 2004 and were re
Comparative Analysis Case The Coca-Cola Company versus PepsiCo, Inc. Instructions: Go to KWW website and use information found there to answer the following questions related to The Coca-Cola versus PepsiCo, Inc. a) (1) What specific items does Coca-Cola discuss in its Note 1-Accounting Polices? (Prepare a
Source documents, overhead rate, total cost/unit cost, Entry record. E2-6 Battle Company Job Cost Sheet Job No. 469 Quantity 2000 Item White Lion Cages Date Requested 7/2 For Tesla Company Date Completed 7/31 Date Direct Materials Direct Labor Manufacturing Overhead 7/10 828