ZuoTi.Pro
Question
Salaries are considered an ordinarg and necessart expense of a trade or business if they meet what ogbwr

Exam #1 - Problems Question #1 - 10 points Alfreds Enterprises, an unincorporated entity, pays employee salaries of $100,000
business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

A) Under the cash method, expenses are reported when actually paid. So, during the current year total deduction for salaries is $ 100,000

B) Under the accrual method, expenses are reported when incurred regardless of when actually paid. So, during the current year total deduction for salaries is $ 112,000. Out of which $ 100,000 paid in current year and $ 12,000 earned by the employees in current year but not paid during current year.

0 0
Add a comment
Know the answer?
Add Answer to:
Salaries are considered an ordinarg and necessart expense of a trade or business if they meet...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Salaries are considered an ordinary and necessary expense of a trade or business if they meet...

    Salaries are considered an ordinary and necessary expense of a trade or business if they meet what other requirement? What are the tax consequences if this requirement is not met?

  • During 2018, the first year of operations, Silver, Inc., pays salaries of $175,000. At the end...

    During 2018, the first year of operations, Silver, Inc., pays salaries of $175,000. At the end of the year, employees have earned salaries of $20,000, which are not paid by Silver until early in 2019. What is the amount of the deduction for salary expense? a. If Silver uses the cash method, $0 in 2018 and $195,000 in 2019. Ob. If Silver uses the cash method, $175,000 in 2018 and $0 in 2019. c. If Silver uses the accrual method,...

  • Taxation

    Pedro is an employee at a large electronics retailer whose gross profit percentage is 36%. The employer offers a discount to its employees, and Pedro uses this program to purchase products with a retail value of $2,250. Pedro pays $1,050. Determine the amount Pedro must include in gross income with respect to this transaction.Enter answer:Pedro, a single taxpayer, operate a sole proprietorship that is not a Specified Service Trade or Business. For the taxable year, Pedro earns $110,000 in business...

  • Required For each transaction, determine the amount of revenue or expense, if any, that is recorded...

    Required For each transaction, determine the amount of revenue or expense, if any, that is recorded under accrual-basis accounting and under cash-basis accounting Accrual-Basis Cash-Basis Transaction Revenue Expense Revenue Expense 1. Receive cash from customers at the time of service, $2,700. 2. Issue common stock for cash, $5,000 3. Receive cash from customers who were previously billed, $1,200. 4. Incur utilities cost in the current month but do not pay, $500 5. Pay workers' salaries for the current month, $600....

  • CP 11-6 Recognizing pension expense The annual examination of Felton Company's financial statements by its external...

    CP 11-6 Recognizing pension expense The annual examination of Felton Company's financial statements by its external public accounting firm (auditors) is nearing completion. The following conversation took place between the controller of Felton Company (Francie) and the audit manager from the public accounting firm (Sumana): Sumana: You know, Francie, we are about to wrap up our audit for this fiscal year. Yet, there is one item still to be resolved. Francie: What's that? Sumana: Well, as you know, at the...

  • is problem is for the 2018 tax year. Alfred E. Old and Beulah A. Crane, each...

    is problem is for the 2018 tax year. Alfred E. Old and Beulah A. Crane, each age 12, married on September 7, 2016. Alfred and Beulah will file a joint return for 2018. Alfred's Social Security number is 111-11-1109. Beulah's Social Security number is 123-45-6780, and she adopted old as her married name. They live at 211 Brickstone Drive, Atlanta, GA 30304 Alfred was divorced from Sarah Old in March 2016. Under the divorce agreement, Alfred is to pay Sarah...

  • Alfred E. Old and Beulah A. Crane, each age 42, married on September 7, 2016. Alfred...

    Alfred E. Old and Beulah A. Crane, each age 42, married on September 7, 2016. Alfred and Beulah will file a joint return for 2018. Alfred's Social Security number is 111-11-1112. Beulah's Social Security number is 123-45-6789, and she adopted "Old" as her married name. They live at 211 Brickstone Drive, Atlanta, GA 30304. Alfred was divorced from Sarah Old in March 2016. Under the divorce agreement, Alfred is to pay Sarah $1,250 per month for the next 10 years...

  • Under cash-basis accounitng, which of the following would be recorded as an expense? a. Insurance that...

    Under cash-basis accounitng, which of the following would be recorded as an expense? a. Insurance that expires in the current period that was paid for in the previous period. b. Cash paid for dividends in the current period. c. Cash paid for rent in the current period. d. Employee salaries in the current period that will be paid next period. e. Two of the other answers are correct. At the time a company purchases land using cash, which of the...

  • The City of Pfeiffer starts the year of 2017 with the general fund and an enterprise...

    The City of Pfeiffer starts the year of 2017 with the general fund and an enterprise fund. The general fund has two activities: education and parks/recreation. For convenience, assume that the general fund holds $123,000 cash and a new school building costing $1 million. The city utilizes straight-line depreciation. The building has a 20-year life and no salvage value. The enterprise fund has $62,000 cash and a new $600,000 civic auditorium with a 30-year life and no salvage value. The...

  • TunaCo purchases 25% of Stanley, Inc. on January 1 of the current year for $505,000. This...

    TunaCo purchases 25% of Stanley, Inc. on January 1 of the current year for $505,000. This acquisition gives TunaCo the ability to significantly influence Stanley's operating and financing policies. Stanley reports assets on that date of $1,600,000 with liabilities of $400,000. One building with a 15-year remaining life has a book value of $100,000 and a fair market value of $400,000. Any remaining excess must be Goodwill. During the current year, Stanley reports net income of $140,000 while paying dividends...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT