Angeles De Guzman is a lawyer specializing in corporate tax law. Provided below isa trial balance taken on Dec. 31, 2017: De Guzman Legal Services Trial Balance Dec. 31, 2017 P 75,000 8,000 Cash Office Supplies Prepaid Insurance Office Equipment 12,000 150,000 60,000 Computer Equipment Notes Payable Accounts Payable P 50,000 5,000 114,000 De Guzman, Capital De Guzman, Withdrawals 35,000 390,000 Consulting Revenues Rent Expensę Salaries Expense 50,000 120,000 Telephone Expense 10,000 Utilities Expense 39,000 P559,000 P559,000 information for year-end adjustments: Office supplies on hand at year-end amounted to P3,000. On Jan. 1 of the current year, De Guzman purchased office equipment which cost P150,000 with an expected life of 5 year and no salvage value. Computer equipment costing P60,000 with an expected life of three years and no salvage value was purchased on July 1 of the current year. A premium of P12,000 for a one-year. insurance policy was paid on Dec. 1. Salaries earned by legal aide, which have not yet been paid, amounted to P3,000. a. b. C. d. e. Required: 1. Prepare the adjustments on the worksheet and complete the worksheet. 2. Journalize the adjusting entries.

Angeles De Guzman is a lawyer specializing in corporate tax law. Provided below isa trial balance taken on Dec. 31, 2017: De Guzman Legal Services Trial Balance Dec. 31, 2017 P 75,000 8,000 Cash Office Supplies Prepaid Insurance Office Equipment 12,000 150,000 60,000 Computer Equipment Notes Payable Accounts Payable P 50,000 5,000 114,000 De Guzman, Capital De Guzman, Withdrawals 35,000 390,000 Consulting Revenues Rent Expensę Salaries Expense 50,000 120,000 Telephone Expense 10,000 Utilities Expense 39,000 P559,000 P559,000 information for year-end adjustments: Office supplies on hand at year-end amounted to P3,000. On Jan. 1 of the current year, De Guzman purchased office equipment which cost P150,000 with an expected life of 5 year and no salvage value. Computer equipment costing P60,000 with an expected life of three years and no salvage value was purchased on July 1 of the current year. A premium of P12,000 for a one-year. insurance policy was paid on Dec. 1. Salaries earned by legal aide, which have not yet been paid, amounted to P3,000. a. b. C. d. e. Required: 1. Prepare the adjustments on the worksheet and complete the worksheet. 2. Journalize the adjusting entries.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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At the beginning of 2021, Pitman Co. had pretax financial income of $1,200,000. Additionally, there was a timing difference of $300,000 due to an accounts receivable that will not be collected until the following year. The tax rate us 30%. A. Calculate the total taxable income for 2021. B. Calculate Income tax expense, income tax payable, and the deferred amount for 2021, and create the journal entry.
Hank started a new business, Hank's Donut World (HW for short), in June of last year. He has requested your advice on the following specific tax matters associated with HW's first year of operations. Hank has estimated HW's income for the first year as follows: Revenue: Donut sales Catering revenues Expenditures: Donut supplies Catering expense Salaries to shop employees Rent expense Accident insurance premiums Other business expenditures Net Income $ 290,000 96,390 $394,398 $153,220 39,640 64,000 49,940 8,952 9,610 -325,362 $ 69,028 HW operates as a sole proprietorship, and Hank reports on a calendar year. Hank uses the cash method of accounting and plans to do the same with HW (HW has no inventory of donuts because unsold donuts are not salable). HW does not purchase donut supplies on credit, nor does it generally make sales on credit. Hank has provided the following details for specific first-year transactions. 1. A small minority of HW clients complained about the catering service.…
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Lewes Company appropriately uses the installment sales method for tax purposes and the accrual method for revenue recognition for accounting purposes. Pertinent data at December 31, 2016, the close of the first year of operations, are as follows: Revenue Recognized Revenue Recognized Customer for Accounting Purposes for Tax Purposes Lowe's Builders $200,000 $100,000 Top Down Plumbing 500,000 350,000 Glass Plus Windows 600,000 350,000 Lewes's tax rate is 30%. What amount should be included in the deferred tax account at December 31, 2016 for these installment sales?
Target Co is a large transport company. In the previous financial year, it billed one of its customers $ 1,500 for services that it had provided. Target Co has recently discovered that the client is experiencing financial distress and will not be able to pay its bill. What action should Target Co take from a tax perspective? (Maximum 250 words)
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Zhie reports the following business transactions: Gross sales P840,000 Sales discounts 25,000 Cost of sales 250,000 Operating expenses 190,000 Interest income on bank deposits- BPI 10,000 Zhie also earned a total compensation of P410.020, from a part-time employment of which, P105,000 is excluded from taxation. Compute the taxable income of zhie which is subject to regular income tax:
An accountant for a corporation forgot to pay the firm's income tax of $725,718.89 on time. The government charged a penalty of 7.8% interest for the 43 days the money was late. Find the total amount (tax and penalty) that was paid. Assume 365 days in a year The total amount paid was $ (Round to the nearest cent as needed.) CELLS
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…
Amy and Brian were investigating the acquisition of a tax accounting business, Bottom Line Incorporated (BLI). As part of their discussions with the sole shareholder of the corporation, Ernesto Young, they examined the company’s tax accounting balance sheet. The relevant information is summarized as follows: Note: Leave no answer blank. Enter zero if applicable. Negative amounts should be indicated by a minus sign. FMV Adjusted Tax Basis Appreciation Cash $ 10,000 $ 10,000 Receivables 15,000 15,000 Building 100,000 50,000 50,000 Land 225,000 75,000 150,000 Total $ 350,000 $ 150,000 $ 200,000 Payables $ 18,000 $ 18,000 Mortgage* 112,000 112,000 Total $ 130,000 $ 130,000 * The mortgage is attached to the building and land. Ernesto was asking for $400,000 for the company. His tax basis in the BLI stock was $100,000. Included in the sales price was an unrecognized customer list valued at $100,000. The unallocated portion of the purchase price…
jane Jackson resides in Edmonton, AB, and has been employed by Finlay Ltd. for a number of years as their accountant. Jane’s T4 slip for the current year indicates the following amounts were deducted from her gross salary of $80,000: Deductions Amounts CPP (maximum for the year*) EI (maximum for the year*) RPP contributions $4,500.00 Income tax deducted 20,000.00 Union dues 300.00 Charitable donations 1,200.00 * See the current year’s tax rate sheet to determine the CPP and EI reported on the T4 slip. The following amounts are paid by Finlay Ltd. and not included on Jane’s current year T4 slip: Paid by Findlay Ltd. Amounts Private health insurance plan premiums $1,800 Public health insurance plan premiums 1,500 Group term life insurance policy premiums 400 Allowance for incidental expenses ($400 per month) 4,800 Finlay Ltd. provided Jane with a motor vehicle for the entire year, and the company also…