Answer : False
Explanation ;
As a general rule , C Corporation must use the accrual method of accounting , However under several excemption to the rule ( eg : Average annual gross receipt of $ 26 Million or less for the most recent 3 year period a C corporation can use the cash method .
Calculator As a general rule, corporations must use the cash method of accounting. However, under several...
Which of the following C corporations will be allowed to use the cash method of accounting for 2018? Explain your answers. a. Jade Corporation, which had a gross receipts of $25.3 million in 2015, $24.1 million in 2016, and $25 million in 2017. b. Lime Coporation a personal service corporation, which had gross receipts of $25.8 million in 2015, $25.2 million in 2016, and $24.4 million in 2017.
Which of the following statements describe the correct rules for the accounting method generally required for corporations? Accrual if the corporation had average sales (gross receipts) for the past three years of less than $1 million. Cash if the business is a personal service business with over $15 million in sales. Accrual if the corporation has more than $26 million in average annual sales for the past three years. Accrual if the business is a service company and has over...
Gaffney Corporation is a wholesale distributor of auto parts and uses the cash method of accounting. The company’s sales have been about $8,775,000 per year for the last few years. However, Gaffney has the opportunity to acquire an unincorporated competitor with annual sales of $9,652,500. Complete the following paragraph regarding the accounting implications of acquiring the competitor. For the year of acquisition, Gaffney and the acquired business will be treated as a single business. Gaffney must consider the combined gross receipts...
12. Under the new method of accounting, service revenues are reported on the income statement in the period in which an agreement is made on cash is received the services are performed 13. A sale is made with credit terms that allow the customer to pay in 30 days. Under the accrual method of accounting the account to be credited at the time of the sale is Accounts Receivable Cash Sales 14. When the company receives the money from its...
QUESTION 10 Marital status is determined on the first day of an individual's taxable year. True False QUESTION 11 To protect against the negligence penalty for substantial understatement of the tax liability (without disclosure), the taxpayer's position must have substantial authority. True False QUESTION 12 Adjusted gross income is total income after subtracting all deductions. True False Question Completion Status: QUESTION 13 X and Y are the divorced parents of JR. The divorce was granted in June of 2020 and...
1. How does financial accounting differ from tax accounting? 2. Jason is single and uses the calendar year for his tax year. He died on May 15, 2019. When is his final income tax return due! 3. If a taxpayer is on the fiscal year, what is the requirement regarding the taxpayer's books? 13. In which of the following cases must the taxpayer annualize its income for a period of less than 12 months? a. Alpha Corporation was formed on...
Please answer the True/False questions to the best of your knowledge. 1) For federal tax purposes, gross income from the sale of tangible goods is reduced by the seller's cost of goods sold. 2) Taxable income is defined as gross income minus allowable deductions and credits. 3) A taxpayer that wants to change its taxable year from a fiscal year to a calendar year is not required to receive permission from the IRS to make the change. 4)...
QUESTION 1 Tom, age 13, is claimed as a dependent by his parents. Tom has unearned income of $3,400 and $300 of income from mowing lawns in the neighborhood. If the first $2,600 of Tom's net unearned income is taxed at 10%, what is Tom’s 2019 income tax liability? a. None of these b. $260 c. $370 d. $0 e. $459 QUESTION 2 The 3.8 percent ACA Medicare tax does not apply to: a. Wages b. Interest c. Capital gains...
Pronghorn Corporation began operations on January 1, 2014.
Recently the corporation has had several unusual accounting
problems related to the presentation of its income statement for
financial reporting purposes. The company follows ASPE.
You are the CPA for Pronghorn and have been asked to examine the
following data:
PRONGHORN CORPORATION
Income Statement
For the Year Ended December 31, 2017
Sales
$9,600,000
Cost of goods sold
5,960,000
Gross profit
3,640,000
Selling and administrative expense
1,314,000
Income before income tax
2,326,000
Income...
Bridgeport Corporation began operations on January 1, 2017. Recently the corporation has had several unusual accounting problems related to the presentation of its income statement for financial reporting purposes. The company follows ASPE. You are the CPA for Bridgeport and have been asked to examine the following data: BRIDGEPORT CORPORATION Income Statement For the Year Ended December 31, 2020 Sales revenue $9,700,000 Cost of goods sold 6,020,000 Gross profit 3,680,000 Selling and administrative expense 1,328,000 Income before income tax 2,352,000...