1. Bill owns 55% of the outstanding stock of Gates Corporation. During 2015, Gates sold a machine to Bill for $40,000. The machine had an adjusted tax basis of $46,000, and had been owned by Gates Corporation for three years. Determine the taxable gain or loss that Gates Corporation can claim on its 2015 income tax return. 2. Which of the following is true about management accounting?I) Management accounting is associated with the presentation of accounting data.II) Management accounting is extremely sensitive to investors' needs.a. Only Ib. Only IIc. Both I and IId. None of the above 3. Review the Rights & Responsibilities of a Certified Management Accountant.a) What are some of the ethical responsibilities and obligations that management accountants have within an organization?b) Are these responsibilities different than the obligations for financial accountants?

1. Bill owns 55% of the outstanding stock of Gates Corporation. During 2015, Gates sold a machine to Bill for $40,000. The machine had an adjusted tax basis of $46,000, and had been owned by Gates Corporation for three years. Determine the taxable gain or loss that Gates Corporation can claim on its 2015 income tax return. 2. Which of the following is true about management accounting?I) Management accounting is associated with the presentation of accounting data.II) Management accounting is extremely sensitive to investors' needs.a. Only Ib. Only IIc. Both I and IId. None of the above 3. Review the Rights & Responsibilities of a Certified Management Accountant.a) What are some of the ethical responsibilities and obligations that management accountants have within an organization?b) Are these responsibilities different than the obligations for financial accountants?

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter11: The Corporate Income Tax

Section: Chapter Questions

Problem 8MCQ: The purpose of Schedule M-1 on the corporate tax return is to: Reconcile accounting (book) income to...

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You are the new accounting manager at the Barry Transport Company. Your CFO has asked you to provide input on the company's income tax position based on the following: 1. Pretax accounting income was $50 million and taxable income was $6 million for the year ended December 31, 2021. 2. The difference was due to three items: a. Tax depreciation exceeds book depreciation by $40 million in 2021 for the business complex acquired that year. This amount is scheduled to be $60 million in 2022 and to reverse as ($50 million) and ($50 million) in 2023 and 2024, respectively. b. Insurance of $8 million was paid in 2021 for 2022 coverage. c. A $4 million loss contingency was accrued in 2021, to be paid in 2023. 3. No temporary differences existed at the beginning of 2021. 4. The tax rate is 25%. Required: 1. Determine the amounts necessary to record income taxes for 2021, and prepare the appropriate journal entry. 2. Assume the enacted federal income tax law specifies that the tax rate will…
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19. Michael Campbell, age 66, is an instrument technologist in the bauxite industry. Michael provides you with the following information to compute his income tax liability for year of assessment 2013. The profit and loss account relating to the business as at December 31, 2013 is as follows: Revenue from instrument contracts Other income Less Expenses: Wages & salaries Utilities Depreciation Legal fees General expenses Professional fees Net Profit $ 700,000 280,000 570,000 820,000 730,000 680,000 228 Trade, Business, Profession & Vocation Continued $ 10,200,000 70,000 3,780,000 6,490,000 Notes • The legal fees relate to the new building purchased during the year. Included in general expenses are utility bills amounting to $75,000 paid by the business for Michael's house. . Other income relates to gross interest on a fixed deposit received as follows: Gross interest for the period January to June received July 31, 2013 amounted to $60,000, tax deducted at source was $15,000. Gross…
1) Precision Corporation had the following income statement prepared by a new accounting intern for the fiscal year ended December 31, 2020. The management of Precision is concerned that it was not prepared in accordance with generally accepted accounting principles. Precision is a private corporation reporting under ASPE. Precision Corporation Income Statement December 31, 2020 Sales $1,500,000 Interest Revenue 45,000 Issue of Common Shares for Cash 155,000 Total Revenues $1,700,000 Less: Cost of Goods Sold $825,000 Operating Expenses 340,000 Cash Dividends Declared on Common Shares 120,000 Total Expenses 1,285,000 Net Gain $ 415,000 Additional Information: 1. The balance of Retained Earnings was $472,000 on January 1st, 2020. 2. Precision had a profit from discontinued operations of $70,000 and a loss on the disposal of assets of the discontinued operations of $40,000 during 2020. 3. It was discovered that sales had been overstated by $100,000 in 2019. 4. The corporate income tax…
The purpose of Schedule M-1 on the corporate tax return is to: Reconcile accounting (book) income to taxable income. Summarize the dividends received deduction calculation. List the officers of the corporation and their compensation. Calculate the net operating loss deduction.
Cougar’s Accounting Services provides low-cost tax advice and preparation to those with financial need. At the end of the current period, the company reports the following amounts: Assets = $16,000; Liabilities = $13,500; Revenues = $25,000; Expenses = $31,500. Net loss=? Stockholders equity=?
c. Assume the same facts as above and in part (b), except that Washi’s net income included a loss on discontinued operations of $33,000 (net of tax). Prepare the journal entries necessary to record Flounder’s equity in the net income of Washi for 2023. Ignore income taxes. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Debit Credit enter an account title to record investment income and loss enter a debit amount enter a credit amount enter an account title to record investment income and loss enter a debit amount enter a credit amount enter an account title to record investment income and loss enter a debit amount enter a credit amount (To record investment income and loss) enter an account title to record depreciation…
Following particulars have been obtained from the accounts of a company.i) Remuneration of Managing Director 20,000ii) Provision for Bad debts 10,000iii)Provision for taxation 1,50,000iv) Depreciation written off 80,000v) Loss on sale of investments 70,000vi) Depreciation allowable according to Income-Tax Provisions 70,000vii) Net profit after considering the above items 4,50,000Calculate remuneration of Managing Director at 5% of net profit. The net profit should be as per provisions of Companies Act.
Which of the following statements regarding accounting methods is false? A. A C corporation with gross receipts of more than $5 million per year must use the cash method of accounting. B. A sole proprietorship may generally use the cash receipts and disbursements method of accounting unless the business maintains inventory, and gross receipts for the three prior tax periods averages $29 million or less in 2023 ($27 million in 2022 and $26 million in 2019, 2020 and 2021). C. A limited liability company may use the cash method of accounting unless it has elected to be taxed as a corporation, in which its method of accounting may be restricted. D. An S corporation may use the cash method of accounting unless it maintains inventory, and gross receipts for the three prior tax periods averages $29 million or less in 2023 ($27 million in 2022 and $26 million in 2019, 2020 and 2021.
Cougar’s Accounting Services provides low-cost tax advice and preparation to those with financial need. At the end of the current period, the company reports the following amounts: Assets = $16,200; Liabilities = $13,600; Revenues = $25,200; Expenses = $31,600. Required: 1. Calculate net loss. 2. Calculate stockholders' equity at the end of the period.
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