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Taxation: Realized vs recognized gain on sale, adjusted basis, like kind exchange

1. On November 4, 2008, Ezra purchased 2,000 shares of DDD stock for $12,000. On June 12, 2010, Ezra sold the 2,000 shares for $9,000. On June 30, 2010, he purchased 1,000 shares of DDD stock for $5,000. What is Ezra's realized gain or loss and his recognized gain or loss on the June 12, 2010 sale? What is his basis in the st

Tax accounting

Sean is 42 years old. His employer provides him with $300,000 of group term life insurance as a fringe benefit. The policy costs his employer $40 per month. For tax purposes, how much income does Sean have if a. the benefit is provided on a nondiscriminatory basis? b. the benefit discriminates in favor of key employee

Bianca Bicycle Company: Variable Costing and Absorption Costing

Bianca Bicycle Company manufactures mountain bikes with a variable cost of $208. The bicycles sell for $390 each. Budgeted fixed manufacturing overhead for the most recent year was $3,080,000. Planned and actual production for the year were the same. 1. Production 20,000 units Sales 23,400 units 2. Produ

Tax plan for the Republic of Vadar

Personal Income Tax and Revenue Forecasting. When the Soviet Union bloc broke up in the early 1990's, the Republic of Vadar declared its independence. As the country established a monetary system, democratic processes, and a controlled fiscal system, the early problems of hyperinflation, unemployment, and declining standards

Various Accounting-Related Problems

1) Aspen company produces widgets. August production costs are below: Widgets produced 80,000 Direct material (variable) $20,000 Direct labor (variable) $40,000 Supplies (variable) $20,000 Supervision (fixed) $30,000 Depreciation (fixed) $25,000 Other (fixed) $5,000 Total

Should Emily and Richard use a partnership form for apartment

Emily and Richard are interested in purchasing a large 140-unit apartment complex using a partnership. They are wondering the general advantages and disadvantages of partnership formation, as well as the tax issues of partnership. Advise Emily and Richard about forming a partnership. What are at least 2 taxation issues th

A local ophthalmologist's advertising campaign included a certificate for a free radical keratotomy for the lucky winner of a drawing. Ahmad held the winning ticket, which was drawn in December 2007. Ahmad had no vision problems and was uncertain what he should do with the prize. In February 2008, Ahmad's daughter, who lives with his former wife, was diagnosed with a vision problem that could be treated with either prescription glasses or a radial keratotomy. The divorce degree requires that Ahmad pay for all medical expenses incurred for his daughter. Identify the relevant tax issues for Ahmad. 2. Julia owns a principal residence in California, a condo in New York City, and a houseboat in Florida. All of the properties have mortgages on which Julia pays interest. What are the limitations on Julia's mortgage interest deduction? What strategy should Julia consider to maximize her mortgage interest deduction? 3. Jerry purchased a personal residence from Kim. In order to sell the residence, Kim agreed to pay $3,000 in points related to Jerry's mortgage. Discuss the deductibility of the points. 4. Even though Sylvia is a full-time employee at a major software developer, she has never given up her love for pottery. For many years, she has spent evenings and weekends working to develop a profitable pottery business by making original pieces to sell to the general public. How should Sylvia treat the income or loss generated by her pottery venture? What are the tax issues? 5. Laura owns an apartment building and videocassette and DVD rental business. She participates for more than 500 hours in the operations of each activity. Are the businesses active or passive? Explain.

1. A local ophthalmologist's advertising campaign included a certificate for a free radical keratotomy for the lucky winner of a drawing. Ahmad held the winning ticket, which was drawn in December 2007. Ahmad had no vision problems and was uncertain what he should do with the prize. In February 2008, Ahmad's daughter, who lives

Minimum transfer price

The heating division of ITA International produces a heating element that it sells to its customers for $42 per unit. Its variable cost per unit is $19, and its fixed cost per unit is $10. Top management of ITA International would like the heating division to transfer 15,000 heating units to another division within the company a

Intermediate Accounting, Kieso, Weygandt, and Warfield, 14th edition; Wiley.

Accounting 350 - Computer Spreadsheet Assignment #2 (Chapter 7) Dusty Horseman Corporation provides the following aging schedule of accounts receivable at December 31, 2011. The balance in the Allowance for Doubtful Accounts was $175,000 at January 1. During the year, $159,000 of bad debts were written off. Classificat

Bodin Company: Required production, Raw material purchases

Bodin Company budgets on an annual basis. The following beginning and ending inventory levels (in units) are plannned for the year 20x1. One units of raw material are required to produce each unit of finished product. January 1 December 31 Raw material 37,000 48,000

Bannister Case: Variance Analysis

See Attached file for proper format of tables. Bannister Case Bannister manufactures tennis rackets and uses a standard costing system. The master budget income statement for April was based on the expectation of producing 10,000 units and selling 12,000 units. The budgeted sales price was $16 per unit, and total budgete

Ten definitions of the value of a stock for Dr. Washington

Given that Dr. Washington wants to make stocks a major part of his investment portfolio, you decide to focus on how to analyze stocks. You decide to use a large U.S. industrial company, to demonstrate how to analyze stocks. The research department has provided you with the following information regarding this company. This

Taxation: Tax liability for Gigantic Corporation; AMT for Margolin Corporation

Please help with the following accounting problem. What is Gigantic Corporation's net tax liability if its taxable income is $325,000 and it has a general business credit of $125,000? Margolin Corporation has regular taxable income of $120,000. It has positive adjustment of $90,000, preference items of $50,000 and negati

Location strategies

The Bakers Dozen Restaurant is considering opening a new location. It has considered many factors and identified the ones that are most important. Two locations are being evaluated based on these factors, using factor rating. Each location has been evaluated relative to the factors on a 5-point scale. These numbers are shown her

Differences between an all-cash and all-stock transaction

What are the differences (stock, risk, economic, etc.) between an all-cash and all-stock transaction? What are the pros and cons of each? Can you cite an example of either an all-stock or all-cash merger/acquisition? How about more complex transactions -- can we think of examples?

Incremental Analysis

________________________________________ Mayfield Software Case Mark Pelton works for Mayfield Software. As a vendor account manager (VAM), he is responsible for Mayfield's relationship with Nelson Electronics. Nelson Electronics manufactures an ergonomic keyboard. Mayfield Software designed the keyboard and markets it, but

Taxation: Compute tax savings for two filing alternatives for Eileen

Eileen files as head of household and earns a salary of $75,000. She has a 4 yr old dependent daughter for whom she pays $5000 in annual day care expenses so that she can go to work. Her employer offers a dependent care flexible spending arrangement (FSA) in which she could contribute up to $5000 on a pretax (before FICA and inc

Volume Variance, Quantity, Price and Total Variances

A hospital manager budgeted $100,000 for monthly nursing expenses in the hospital's well-baby clinic. The manager expected that the clinic would treat $5000 babies and pay its nurses $40 per hour. Instead, the clinic treated 6000 babies and used 3200 hours of nursing time at $37.50 an hour. Calculate the total, quantity, pric

An Accounting Equation

Consider the following statements: I. The payment of a liability in cash will decrease stockholders' equity. II. The purchase of equipment for cash has no effect on total assets value. III. When a business borrows money from a bank, both the left and right sides of the accounting equation increase. a) All statements I,

1)variable utilities cost per machine hour. 2) the fixed utilities cost per month 3) using the high-low method, the utilities cost associated with 980 machine hours would be?

Hot'lanta, Inc, which uses the high-low method to analyze cost behavior, has determined that machine hours best explain the company's utilities cost. The company's relevant range of activity varies from a low of 600 machine hours to a high of 1,100 machine hours, with the following data being available for the first six months o

Accounting for Investments in Subsidiaries

1. Firm A purchased 100% of the outstanding stock of Firm B, paying 10$ a share. The purchase occurred on Sunday, January 31st and Firm A already paid for the deal using cash it had accumulated after a very profitable holiday sales season. Executives of Firm A were very satisfied with the deal, as the price they paid was signifi

Medical Instruments: Compute the materials variances for silver tubing.

Medical Instruments produces a variety of electronic medical devices. Medical Instruments uses a standard cost system and computes price variances at the time of purchase. One product, a thermometer, measures patient temperature orallt. It requires a silver lead with a standard length of 5 inches per thermometer. To make the