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# Primary authority for calculation

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What primary authority is used to calculate the attached problems? See attached file for full problem description.

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(3)
(a) Total taxable income = 2,000 + 55,000 + 10,000 = \$67,000
Under the Self-employment section of the Tax Code, the entire amount is taxable at the given rate (30%). Hence his after-tax cash flow is (1 - 0.3)*67,000 = \$46,900.

(b) Total taxable income = 2,000 + 55,000 + 50,000 = \$107,000
Under the Self-employment section of the Tax Code, only the first \$94,200 is taxable at the given rate (30%). Hence his after-tax cash flow is: (107,000 - 94,200) + (1 - 0.3)*94,200 = 12,800 + 65,940 = \$78,740.

(5)
(a) There is no way to know how much the plan will ultimately give the employee ...

#### Solution Summary

The solution explains what authority would be used for a number of problems.

\$2.19

## Principles of Accounting - Terms, Accounting Equation, Audience of Financial Statements

Part I. Discuss the terms listed below. Your discussion should expand on the definition. Explain why these concepts are important to financial statements.

- Generally Accepted Accounting Principles (US GAAP);
- International Accounting Standards (IFRS);
- Securities and Exchange Commission (SEC);
- Public Company Accounting Oversight Board (PCAOB);
- Annual report
- 10-K

Part II: Explain the accounting equation and prepare a table showing the equation and show a list of accounts belonging to each category in the equation. You should include at least five accounts for each category.

Part III. Comment on the primary intended audience of the financial statements. What other groups that may be interested in the financial information released by the company? Discuss.

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