Homework Answers
a) The Light Company can Opt For change In period of taxable, he must follow cut of procedures so he can segregate the income between two periods. He must record all the transactions between jan to april and calculate depreciation for the complete year . The Income earned during this period is chargeable to tax under the the FY 2019-20
b) The Tax liability for the year is to be calculated on the income for the period Between January to April I.e) on $50,000. The Tax should be Calculated as per Applicable Tax Rate prescribed.
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34. The Light Record Corporation has been on the calendar year since its inception five years...
2. Southern Corporation, a calendar year corporation, was formed 3 years ago by its sole shareholder,...
2. Southern Corporation, a calendar year corporation, was formed 3 years ago by its sole shareholder, Jason, who has operated as an S corporation since its inception. Last year, Jason made a direct loan to the company in the amount of $4,000. Southern Corporation has paid interest on the loan but has not yet paid any principal (Assume the loan qualifies as debt for tax purposes). In year 4, War Eagle Corp experiences a $25,000 ordinary business loss and earns...
Pebble Corporation, an accrual basis taxpayer, has struggled to survive since its formation, six years ago....
Pebble Corporation, an accrual basis taxpayer, has struggled to survive since its formation, six years ago. As a result, it has a deficit in accumulated E & P at the beginning of the year of $340,000. This year, however, Pebble earned a significant profit; taxable income was $240,000. Consequently, Pebble made two cash distributions to Martha, its sole shareholder: $150,000 on July 1 and $200,000 December 31. The following information might be relevant to determining the tax treatment of the...
Question 2 (6 Points) Andersen Corporation, a calendar year, accrual method, C-Corporation, is in the business...
Question 2 (6 Points) Andersen Corporation, a calendar year, accrual method, C-Corporation, is in the business of manufacturing glass based products. In 2019, Andersen Corporation had taxable income before any limitations of $500.000. Andersen Corporation's had average annual gross receipts over the previous three tax years of $29,000,000. The following items of income and deductions are included in the computation of taxable income $400,000 business interest expense $250,000 depreciation $30,000 business interest income $75,000 amortization $100,000 research and development expenses...
Tango Corporation, a calendar year taxpayer, has been an S corporation for several years. Tango's business...
Tango Corporation, a calendar year taxpayer, has been an S corporation for several years. Tango's business activites have become very profitable in recent years. On June 16, 2018, its sole shareholder desires to revoke the S election. Requirements a. How does Tango revoke its S election? When does the revocation take effect? b. Assume Tango files a prospective revocation effective July 1, 2018. What tax returns are required of Tango for 2018? For 2019? When are these returns due? c....
C CORPORATION BOOK-TO-TAX RECONCILIATION. Astro Corporation, an accrual basis, calendar-year C corporation, began o...
C CORPORATION BOOK-TO-TAX RECONCILIATION. Astro Corporation, an accrual basis, calendar-year C corporation, began operations on January 2, 2010. For each item below, determine the 2019 Schedule M-1 adjustment to reconcile book income to taxable income, i.e., the amount and the effect ( + or -). Net income per books $950,000 Provision for Federal income taxes, $240,000 Municipal bond interest, $12,000 During 2019, Astro increased its allowance for uncollectible accounts by $30,000; actual bad debts written off in 2019 were $36,000....
Company began operations several years ago and has used the average-cost method of inventory valuation since its inception. In 2019, it decides to switch to the FIFO method. You are provided with the...
Company began operations several years ago and has used the average-cost method of inventory valuation since its inception. In 2019, it decides to switch to the FIFO method. You are provided with the following information. Net income under avg cost Excess of average cost over fifo cost goods sold pretax Net income FIFO basis Years prior 2017 $370,000 $72,000 2017 $340,000 60,000 2018 $320,000 44,000 2019 $380,000 Instructions: 1. Prepare the journal entry to record the change from the Average...
Timpanogos Inc. is an accrual-method calendar-year corporation. For 2019, it reported financial statement income after taxes...
Timpanogos Inc. is an accrual-method calendar-year corporation. For 2019, it reported financial statement income after taxes of $1,152,000. Timpanogos provided the following information relating to its 2019 activities: Life insurance proceeds as a result of CEO’s death $ 200,000 Revenue from sales (for both book and tax purposes) 2,000,000 Premiums paid on the key-person life insurance policies. The policies have no cash surrender value. 21,000 Charitable contributions 180,000 Cost of goods sold for book and tax purposes 300,000 Interest income...
During the current year, Sparrow Corporation, a calendar year C corporation, had operating income of $425,000,...
During the current year, Sparrow Corporation, a calendar year C corporation, had operating income of $425,000, operating expenses of $280,000, a short-term capital loss of $10,000, and a long-term capital gain of $25,00 w much is Sparrow's income tax liability for the year? $32,700 $33,600 $45,650 $62,400 1. Dahlia Corp. was organized and commenced Operations in 1930. At December 1, 2020, Dahlia had accumulated earnings and profits of $9,000 before a dividend declaration and distribution, On Decemb 2 020, Dahlia...
Beta Corporation has been in business for two years. It incurred the following items last year...
Beta Corporation has been in business for two years. It incurred the following items last year (Year 1) Beta reported the following hems this year (Year 2) (Click the icon to view the items for Year 1.) (Click the icon to view the items for Year 2) Requirement Compute Beta's taxable income and ability for Year 1 and Year 2 Begin by computing Beta's tacable income for Year 1. (If an input field is not used in the table, leave...
Luther Corporation has been owned for six years with its stock held 60 percent by John...
Luther Corporation has been owned for six years with its stock held 60 percent by John (Stock basis of $162,000) and 40 percent by Alice (stock basis of S181,575). John and Alice are not related. Luther Corporation has the following assets on December 31, 2019: Adjusted Basis to Luther Corporation Fair Market value Cash. ...........................$ 8,100 .................................. 8,100 - Inventory ............................................ 113.400 ... ............... 40,500 - Office building ................... .......40,500 - Stock held for investment.................24,300 ......................... 42,000 in unrelated Corporation...
2. Southern Corporation, a calendar year corporation, was formed 3 years ago by its sole shareholder, Jason, who has operated as an S corporation since its inception. Last year, Jason made a direct loan to the company in the amount of $4,000. Southern Corporation has paid interest on the loan but has not yet paid any principal (Assume the loan qualifies as debt for tax purposes). In year 4, War Eagle Corp experiences a $25,000 ordinary business loss and earns...
Question 2 (6 Points) Andersen Corporation, a calendar year, accrual method, C-Corporation, is in the business of manufacturing glass based products. In 2019, Andersen Corporation had taxable income before any limitations of $500.000. Andersen Corporation's had average annual gross receipts over the previous three tax years of $29,000,000. The following items of income and deductions are included in the computation of taxable income $400,000 business interest expense $250,000 depreciation $30,000 business interest income $75,000 amortization $100,000 research and development expenses...
Tango Corporation, a calendar year taxpayer, has been an S corporation for several years. Tango's business activites have become very profitable in recent years. On June 16, 2018, its sole shareholder desires to revoke the S election. Requirements a. How does Tango revoke its S election? When does the revocation take effect? b. Assume Tango files a prospective revocation effective July 1, 2018. What tax returns are required of Tango for 2018? For 2019? When are these returns due? c....
C CORPORATION BOOK-TO-TAX RECONCILIATION. Astro Corporation, an accrual basis, calendar-year C corporation, began operations on January 2, 2010. For each item below, determine the 2019 Schedule M-1 adjustment to reconcile book income to taxable income, i.e., the amount and the effect ( + or -). Net income per books $950,000 Provision for Federal income taxes, $240,000 Municipal bond interest, $12,000 During 2019, Astro increased its allowance for uncollectible accounts by $30,000; actual bad debts written off in 2019 were $36,000....
During the current year, Sparrow Corporation, a calendar year C corporation, had operating income of $425,000, operating expenses of $280,000, a short-term capital loss of $10,000, and a long-term capital gain of $25,00 w much is Sparrow's income tax liability for the year? $32,700 $33,600 $45,650 $62,400 1. Dahlia Corp. was organized and commenced Operations in 1930. At December 1, 2020, Dahlia had accumulated earnings and profits of $9,000 before a dividend declaration and distribution, On Decemb 2 020, Dahlia...
Beta Corporation has been in business for two years. It incurred the following items last year (Year 1) Beta reported the following hems this year (Year 2) (Click the icon to view the items for Year 1.) (Click the icon to view the items for Year 2) Requirement Compute Beta's taxable income and ability for Year 1 and Year 2 Begin by computing Beta's tacable income for Year 1. (If an input field is not used in the table, leave...
Luther Corporation has been owned for six years with its stock held 60 percent by John (Stock basis of $162,000) and 40 percent by Alice (stock basis of S181,575). John and Alice are not related. Luther Corporation has the following assets on December 31, 2019: Adjusted Basis to Luther Corporation Fair Market value Cash. ...........................$ 8,100 .................................. 8,100 - Inventory ............................................ 113.400 ... ............... 40,500 - Office building ................... .......40,500 - Stock held for investment.................24,300 ......................... 42,000 in unrelated Corporation...
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