Refer to the IRS's ATG on Auto Dealership.Suppose a dealer sells a car to a customer forthe following:Sales Price (including Sales Tax and licensefees) $10,000Less: Down Payment 1,000Balance to Be Financed $ 9,000Finance Charge at 10% 900Face amount of Installment Note $ 9,900The dealer sells the note to a financecompany who agrees to pay the dealer a 20%commission on the finance charge, or $180.(a) What is the correct entry to make?(b) Referring to J.R. Hansen, SCt, 59-2 USTC19533, 360 US446, 79 SCt 1270, when is theamount held back taxable to the dealership?

Note: Note can be defined as the instrument issued by a lender to the borrower that reflects the…

Answered: (a) What is the correct entry to make?…

(a) What is the correct entry to make? (b) Referring to J.R. Hansen, SCt, 59-2 USTC 19533, 360 US446, 79 SCt 1270, when is the amount held back taxable to the dealership?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: rent income received by a lessor is not reportable as taxable

A: Income received means the amount of money received in respect of income generating activity. Income…

Q: Which of the following taxpayers is required to file a form 8862 to claim certain credits after…

A: An exemption known as a withholding allowance lowers the amount of income tax that an employer…

Q: It is talking about Hong Kong Tax, Special Business, Calculating Profit tax of financial…

A: The question is asking about the relationship between different sections of the Hong Kong Tax Law,…

Q: Which of the following cases would result in a Deferred Tax Liability? I – CA of Asset > TB of Asset…

A: Solution: following cases would result in a Deferred Tax Liability as they will create future…

Q: A VAT-registered company acquired one vehicle for land transport for the use of an official or…

A: Solution Vat registration is the process listing your business with the government as active in…

Q: How is sale of property recorded in individual taxation? What are the classifications of property…

A: Individual taxation involves the assessment and collection of taxes on income, capital gains, and…

Q: What happens when a qualified exempt importer subsequently sells what was imported to a taxable…

A: when a qualified exempt importer subsequently sells to non exempt person, the purchaser shall be…

Q: explain the basic conditions an item must meet in order for an expenses to pass the test of…

A: Taxation is the process by which a government or trying authority imposes impositions on…

Q: 7. Compute Working Capital: a. 60,000 b. 50,000 c. 55,000 d. 100,000 e. 10,000 3. Compute Current…

A: Ratio Analysis -When comparing one business to another in the same sector or industry, ratio…

Q: No deductions shall be allowed where the transaction is between “related taxpayers” under Sec. 36(B)…

A: Solution Concept As per the provision of the Tax Code The interest expense in not allowed for…

Q: 3. What determines the timing of revenue recognition with respect to licenses of symbolic…

A: Financial Accounting Standards Board (FASB): FASB is an independent 7 member board, of accounting…

Q: Blossom Inc. purchased a non-renewable licensing agreement for access to proprietary technology that…

A: An impairment test is done on the asset to assess the worth of the assets at the end of a period.…

Q: Hello!! I need your assitance on the following problem. Problem 5-28 (LO. 1, 2) In each of the…

A: Dividend received deduction: A dividend received deduction is shown in FORM 1120. There is a…

Q: Which of the following statements are TRUE? (i) Interest expense incurred on loan to purchase motor…

A: Section 14Q relates to the eligible deduction pertaining to renovation and refurbishment works of…

Q: True (t) or False (f) ______ The IRS does not require the taxpayer to use the same depreciation…

A: Due to various reasons such as normal wear & tear, obsolescence, change in technology, etc., the…

Q: Assume that the written down value of assets in the pool 2 is GH 100 000 and the repairs and…

A: Due to multiple questions, only one question has solved due to guidelines.The allowable expenses is…

Q: It is talking about Hong Kong Tax, Special Business, Calculating Profit tax of financial…

A: The objective of the question is to understand the relationship between S.14, S.15(i), D7/84 and the…

Q: An equitable lien is best describes by which of the following statements? Multiple Choice O It is a…

A: An equitable lien is a legal claim on property that arises from an equitable principle of fairness…

Q: urt approach allocates more propen urt and the IRS approaches allocate proach allocates interest…

A: The right answer is B The tax court and the IRS approaches allocate the same amount of expenses ,…

Q: It is the place where an authority has the right to impose and collect taxes. * a. Source…

A: Tax: It refers to a mandatory financial levy imposed by the government on the taxpayer including…

Q: Outline the differences between IRC Section 311 and 336/337 for non-liquidating and liquidating…

A: It represents the deregistration of company after the assets are being sold and the operations are…

Q: Required information [The following information applies to the questions displayed below.] In each…

A: Adjusted gross income (AGI) is calculated by deducting some specific deduction from gross total…

Q: Please advise on the answers for After Tax (C) the first two answers are wrong. It is not -26100 and…

A: Discontinued operations refer to the business units that start turning unprofitable to the business.…

Q: Which of the following can be income deferral transactions? I. Sale of municipal bonds II.…

A: Answer: Only statement II is correct. So, correct option is b.

Q: Required: Answer the following questions in section C2.6.1 Aligning COA and Tax Return. QBO COA 1.…

A: Taxes are generally major source of revenue for the government. Every individual or business needs…

Q: Under Section 1031 a personal residence or an automobile used solely for personal purposes will…

A: A 1031 exchange is provision of the IRC that allows the business to defer the federal tax on some…

Q: When a sale is made and sales tax is collected from the customer, the sales tax is recorded as a/an…

A: Sales tax is collected by the business owner for the government from the customer .

Q: 1. What is the tax preparer required to disclose before allowing a customer to apply for a Financial…

A: a) All filing and product options available to the customer, including those with no additional…

Q: Required: Briefly describe which of the following deductions would be deductible under section 8-1…

A: Even if the mentioned deductions are not explicitly stated in the legislation, donations made by an…

Q: Question 18 of 30. Distributable net income (excluding tax-exempt ir Serves as the upper limit on…

A: Distributable Net Income The amount of a trust's income allocated to the beneficiaries is known as…

Q: Label the following as "True" or "False" regarding the definition of business income as it is used…

A: a. False: The taxable income computation for purposes of the § 179 limit generally includes the…

Q: Discuss the circumstances when an investor can use section 1031 of the Internal Revenue Code (IRC)…

A: If the taxpayer sells real estate for a profit, the taxpayer may be subject to capital gains taxes.…

Q: All of the following are examples of facts that may create temporary book-tax differences except…

A: The objective of the question is to identify which of the given options does not create a temporary…

Q: Why in franchise arrangements may it be improper torecognize the entire franchise fee as revenue at…

A: Franchisor: It is an organization or a sole proprietary that provides a franchise for the sale of…

Q: Among the following transactions: municipal bond income. accrual of a loss contingency. a balance…

A: Taxable Income:- It is the amount which one pays on the gross income as per the income tax slab rate…

Q: What guidelines must be followed to classify a transaction as associated with the principal of an…

A: Generally accepted accounting principles are standard accounting principles, standards and…

Q: ABC Laundry uses the income tax basis of accounting, a special purpose framework to prepare its…

A: MACRS(under tax basis) - Under this method, the cost of an asset is capitalised in an accelerated…

Question

Refer to the IRS's ATG on Auto Dealership.
Suppose a dealer sells a car to a customer for
the following:
Sales Price (including Sales Tax and license
fees) $10,000
Less: Down Payment 1,000
Balance to Be Financed $ 9,000
Finance Charge at 10% 900
Face amount of Installment Note $ 9,900
The dealer sells the note to a finance
company who agrees to pay the dealer a 20%
commission on the finance charge, or $180.
(a) What is the correct entry to make?
(b) Referring to J.R. Hansen, SCt, 59-2 USTC
19533, 360 US446, 79 SCt 1270, when is the
amount held back taxable to the dealership?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

390. CHAPTER 4â€”CORPORATIONS: ORGANIZATION AND CAPITAL STRUCTURE Que90 Issues relating to basis arise when a taxpayer is involved in a Â§ 351 transaction. Describe the underlying rules, and the purpose they serve. 391. CHAPTER 4â€”CORPORATIONS: ORGANIZATION AND CAPITAL STRUCTURE Que91 How is the transfer of liabilities in a property transaction generally treated for tax purposes? How is a transfer of liabilities generally treated in a Â§ 351 transaction? What exceptions could arise to this usual treatment in a Â§ 351 setting? 392. CHAPTER 4â€”CORPORATIONS: ORGANIZATION AND CAPITAL STRUCTURE Que92 When forming a corporation, a transferor-shareholder may choose to receive some corporate debt along with stock. Identify some of the issues the transferor must consider when deciding whether debt should be a part of the transaction. 393. CHAPTER 4â€”CORPORATIONS: ORGANIZATION AND CAPITAL STRUCTURE Que93…
Under IFRS, revenue from barter transactions should be measured based on the fair value of revenue from: A . similar barter transactions with unrelated parties.
What is the implication of a tax invoice not being received for the light fittings
In an agreement involving the right to acquire property, which of the following are conditions that must be met in order for the IRS to accept the purchase price set in the agreement as a valid measurement of the value of the property being acquired? The purchase price must be determined by an independent appraisal submitted with an informational gift tax return regardless of the value of the property. The agreement must be a bona fide business arrangement. The agreement cannot be an attempt to transfer the property to a family member for less than full and adequate consideration. The terms of the agreement must be comparable to those that would be entered into by persons in an arm's-length transaction A) I and III B) II and IV C) I and IV D) II, III, and IV
Licenses, registrations & permits, service fees, property rentals are examples of _______. A.cukai langsung / direct tax B.hasil bukan cukai / non -tax revenue C.cukai tidak langsung / indirect tax D.terimaan bukan hasil / non revenue receipts
Sale of real estate is subject to VAT. True, if not made in the regular course of trade or business False, it is exempt if the real estate is classified as capital asset False, it is exempt if what is sold is a resi¬dential unit True, if the real estate is classified as capital asset
Section 162 provides the general rule that expenses incurred in a trade or business are deductible. Reg. §1.162-5 elaborates on the deductibility of A.Travel expenses. B.Expenses of farmers. C.Repairs. D. Expenses for education
Do Interpretation of the data given below in a professional manner. 1. Income from property. – (1) The rent received or receivable by a person [for] a tax year, other than rent exempt from tax under this Ordinance, shall be chargeable to tax in that year under the head "Income from Property". (2) Subject to sub-section (3), "rent" means any amount received or receivable by the owner of land or a building as consideration for the use or occupation of, or the right to use or occupy, the land or building, and includes any forfeited deposit paid under a contract for the sale of land or a building. (3) This section shall not apply to any rent received or receivable by any person in respect of the lease of a building together with plant and machinery and such rent shall be chargeable to tax under the head "Income from Other Sources". [(3A) Where any amount is included in rent received or receivable by any person for the provision of amenities, utilities or any other service connected with…
_______ 9. Which of the following constitute property for purposes of §351 Money Debt of Transferee evidenced by a security Debt of Transferee NOT evidenced by a security Interest accrued on b & c after the Transferor acquired the debt Only A Only A & B Only A, B, & d All of the above
Subject :accounting
Where is the amount of withholding on real property transactions reported on the Form 540? Select one: a. It's not; It's accounted for with a separate filing requirement with the CDTFA. b. As a credit to carry into the payments section of the Form 540 from line(s) 43-45. c. As income withholding on Line 71 d. As a payment for withholding on Line 73.
a) Explain the characteristics of a bill of exchange and state the ways a bill of exchange Inay be discharged. b) Under what circumstances Ina)' a cheque be dishonoured?