A Pirate's Life for Me, Inc. has been doing business for years in New York State providing boat building services. This year is the first year it was able to expand its business to another state, North Carolina. During the year the company had $1,000,000 of sales in New York State and $1.200,000 of sales in North Carolina, A Pirate's Life for Me, Inc. had payroll and property only in New York in the amount of $1,500,000 and $5,000,000, respectively. NC applies a single sale factor apportionment formula. Please explain the tax impact to the company of doing business in North Carolina and where the company will have to file corporate tax returns this year.
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- Willingham Construction is in the business of building high-priced, custom, single-family homes. The company,headquartered in Anaheim, California, operates throughout the Southern California area. The construction periodfor the average home built by Willingham is six months, although some homes have taken as long as nine months.You have just been hired by Willingham as the assistant controller and one of your first tasks is to evaluate thecompany’s revenue recognition policy. The company presently recognizes revenue upon completion for all of itsprojects and management is now considering whether revenue recognition over time is appropriate.Required:Write a 1- to 2-page memo to Virginia Reynolds, company controller, describing the differences between theeffects of recognizing revenue over time and upon project completion on the income statement and balance sheet.Indicate any criteria specifying when revenue should be recognized. Be sure to include references to GAAP asthey pertain to…During Year 1, Ashkar Company ordered a machine on January 1 at an invoice price of $25,000. On the date of delivery, January 2, the company paid $7,000 on the machine, with the balance on credit at 10 percent interest due in six months. On January 3, it paid $1,300 for freight on the machine. On January 5, Ashkar paid installation costs relating to the machine amounting to $2,400. On July 1, the company paid the balance due on the machine plus the interest. On December 31 (the end of the accounting period), Ashkar recorded depreciation on the machine using the straight-line method with an estimated useful life of 10 years and an estimated residual value of $3,800. E8-4 Part 2 2. Compute the acquisition cost of the machine.In the case the details are as follows: “KS delivered 2,500 soft-spike cleats to The Shoe Store for $100,000 in December. The cleats were sold during the holiday season. The cleats can be returned to KS within one year of the purchase date in the case of a manufacturer defect. Past history suggests that 5% of the cleats are returned within the one-year return period. Michael suggests that the revenue should be recorded once the right of return period lapses.” Is the solution to this to record the revenue through accounts receivable (or cash) credit the sales revenue to recognize the income. Then to debit the estimated return liability while crediting the sales returns and allowances to account for the probable 5% returns? if this is not the best solution please tell me what is!
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