Question 1 Completion with Options:
A. used equipment
B. storage warehouse
C. land for future building site
D. new office furniture
E. apartment complex
F. new delivery truck
Answer:
1. The assets purchased in the current year that are eligible to be expensed under Section 179 assuming the cost does NOT exceed the limitations are:
A. used equipment
D. new office furniture
F. new delivery truck
2. $561,000 is the maximum to be expensed with an adjusted basis of 100% for MACRS
Explanation:
There is a maximum deduction of $1,050,000 under section 179. The section affords eligible taxpayers the opportunity to reduce their tax burden in the first year that they purchase eligible properties.
b. Respond in a way which will have no negative consequences
Choose to do nothing about the issue
d. None of the above
Please select the best answer from the choices provided
А
Answer:
Answer C
Explanation:
Solution and Explanation:
The calculation of tax saving is shown below:
if B is getting the whole amount of salary the combined FICA tax liability of B and S Corp will be:
= $110000 multiply with 15.3 divide by 100
= $16830
If B is getting $50000 as salary the combined FICA tax liability of B and S corp will be
= $50000 multiply with 15.3 divide by 100
= $7650
thus the tax saving will be :
$16830 minus $7650
= $9180
The IRS can deem this arrangement unfit as make it mandatory for B to get the whole amount as salary. In that case, no change will take place in the tax liability.
B) $112,000.
C) $90,000.
D) $107,200.
Answer:
C) $90,000
Explanation:
Beginning PBO = Interest cost/Discount rate =
Beginning PBO = $7,200/8%
Beginning PBO = $90,000
Answer:
The Gourmand Cooking School
1. Planning Budget for September:
Fixed Cost Cost per Cost per Planning
per Month Course Student Budget
Instructor wages $ 2,960 $11,840
Classroom supplies $ 270 16,740
Utilities $ 1,220 $ 75 1,520
Campus rent $ 4,800 4,800
Insurance $ 2,300 2,300
Administrative expenses $ 3,900 $ 44 $ 7 4,510
Total $41,710
2) Flexible Budget for September:
Fixed Cost Cost per Cost per Flexible
per Month Course Student Budget
Instructor wages $ 2,960 $11,840
Classroom supplies $ 270 15,120
Utilities $ 1,220 $ 75 1,520
Campus rent $ 4,800 4,800
Insurance $ 2,300 2,300
Administrative expenses $ 3,900 $ 44 $ 7 4,468
Total $40,048
3. The Revenue and Spending Variances for September (based on flexible budget):
Planning Flexible Actual Spending
Budget Budget Variance
Revenue $55,180 $46,280 $52,280 $6,000 F
Instructor wages $11,840 $11,840 $11,120 $720 F
Classroom supplies 16,740 15,120 16,590 1,470 U
Utilities 1,520 1,520 1,930 410 U
Campus rent 4,800 4,800 4,800 0 None
Insurance 2,300 2,300 2,440 140 U
Administrative expenses 4,510 4,468 3,936 532 F
Total $41,710 $40,048 $40,816 $768 U
Explanation:
a) Data and Calculations:
Sales price per student = $890
Planned number of courses = 4
Planned total number of students = 62
Actual number of courses ran = 4
Actual total number of students = 56
Data concerning the company’s cost formulas appear below:
Fixed Cost Cost per Cost per
per Month Course Student
Instructor wages $ 2,960
Classroom supplies $ 270
Utilities $ 1,220 $ 75
Campus rent $ 4,800
Insurance $ 2,300
Administrative expenses $ 3,900 $ 44 $ 7
Actual Results:
Actual Revenue $ 52,280
Instructor wages $ 11,120
Classroom supplies $ 16,590
Utilities $ 1,930
Campus rent $ 4,800
Insurance $ 2,440
Administrative expenses $ 3,936
The planning budget for September, based on 4 courses and 62 students, calculated total expenses of $17,467 and expected revenue of $55,180. The flexible budget was recalculated based on having 4 courses and 56 students, with expenses of $17,629 and revenue of $49,840. Variances between the flexible budget and actuals showed an unfavorable revenue variance of $2,440 and expense variance of $1,387.
The planning budget would be based on the planned courses and student numbers. The calculation includes fixed costs, plus variable costs for each course and student. Considering 4 courses and 62 students, the total expenses come out to be $17,467, while expected revenue would be $55,180 ($890 per student).
The flexible budget would adjust the planned budget based on actual results. Here, with the same 4 courses but only 56 students, the adjusted expenses are $17,629, and the actual revenue is $49,840.
The revenue and spending variances for September can then be calculated by comparing actual results to the flexible budget. The revenue variance is $2,440 unfavorable ($52,280 - $49,840), while the spending variance is $1,387 unfavorable ($19,016 - $17,629).
#SPJ12
2. The Canadian bank account has not been reconciled as of the last fiscal year.
3. The Balance Sheet shows the cumulative balance of the account in the home currency based on the home currency value of each of the transactions using the exchange rate that appears on each screen.
4. You have to perform a home currency adjustment for the Canadian bank account as of the current date
5. You have to perform a home currency adjustment for the Canadian bank account as of the last fiscal year.
Answer:
1. You have to create a journal entry debiting foreign exchange gain or loss $10 and crediting the Canadian bank account $10.
4. You have to perform a home currency adjustment for the Canadian bank account as of the current date
Explanation:
This difference is the result of a foreign exchange loss. Foreign exchange gains/losses are normal for companies that operate in foreign countries. E.g. you prepared your financial statements by converting the foreign currency into your local currency, in this case you converted Canadian dollars to US dollars. But then the exchange rate between the currencies changes. If the value of the Canadian dollar's value increased after conversion, then you gained, and an adjustment must be made to show that gain. But if the Canadian dollar's value decreased after the conversion, then you lost (what happened here) and an adjusting entry must be made to report the loss.
In order to correct his, you must:
Dr Foreign exchange gain/loss 10
Cr Canadian bank account 10
The balance in the Canadian bank account is correctly shown as closed because the Balance Sheet reflects the cumulative balance in the home currency.
The reason why the balance in the Canadian bank account is correctly shown as closed is because the Balance Sheet reflects the cumulative balance of the account in the home currency based on the home currency value of each transaction.
Therefore, even though the account had a $10 debit balance in US dollars, the Canadian dollar balance correctly indicates that the account has been closed.
No journal entry or reconciliation needs to be done for the closed Canadian bank account.
#SPJ3
Answer:
cash 216,000
bond payable 216,000
interest expense 4,320
cash 4,320
interest expense 4,320
interest payable 4,320
cash 178,080
bond payable 168,000
interest payable 10,080
interest payable 10,080
cash 10,080
interest expense 10,080
interest payable 10,080
Explanation:
Monty
issuance will receive the same amount as face value, as it was issued at par
July 1st payment: 216,000 x 8%/4 = 4,320
we divide by 4 as the payment are quarterly and there are 4 quarter per year
we recognize this interest expense and pay it.
accrued interest at December 31th:
we will recognize the interest accrued form october 1st to december 31th
we put a payable account as there is no cash payment
Flounder
issuance will receive the same amount as face value, and the interest accrued from Jan 1st to June 30th as the bonds were issued with delay
168,00 x 12%/2 = 10,080 interest payable
(the payment are semiannually so we split the rate in two)
The sum of these payable and the face value will be the cash proceeds to Flounder
july 1st payment
we "pay" the interest agains the payable account
accrued interest at December 31th:
168,00 x 12%/2 = 10,080 interest expense
we will recognize the nterest accrued form July 1st to december 31th
we put a payable account as there is no cash payment