Beech Corporation, an accrual basis calendar year taxpayer, was organized and began business in June 1st of the current calendar tax year. During the current year, the corporation incurred the following expenses: State fees for incorporation $ 1,570 Legal and accounting fees incident to organization 5,495 Expenses for the sale of stock 6,280 Organizational meeting expenses 2,355 Assuming that Beech Corporation does not elect to expense but chooses to amortize organizational expenditures over 15 years, calculate the corporation's deduction for its current calendar tax year. Round per month calculation to two decimal places. Round your final answer to the nearest dollar. 17 x

Beech Corporation, an accrual basis calendar year taxpayer, was organized and began business in June 1st of the current calendar tax year. During the current year, the corporation incurred the following expenses: State fees for incorporation $ 1,570 Legal and accounting fees incident to organization 5,495 Expenses for the sale of stock 6,280 Organizational meeting expenses 2,355 Assuming that Beech Corporation does not elect to expense but chooses to amortize organizational expenditures over 15 years, calculate the corporation's deduction for its current calendar tax year. Round per month calculation to two decimal places. Round your final answer to the nearest dollar. 17 x

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Insure Corporation reported a net operating loss of $25 million for financial reporting and tax purposes. Taxable income last year and the previous year, respectively, was $20 million and $15 million. The enacted tax rate each year is 25%. Assume that Insure qualifies as a type of company that is allowed to carry back an NOL to two prior taxable years, using the earliest year first. Prepare the journal entry to recognize the income tax benefit of the net operating loss.
Lakeview, a calendar year C corporation, reports the following income and expenses in the current year: Income from operations $400,000 Expenses from operations $280,000 Dividends received (10% ownership) $30,000 On July 15t of the year, Lakeview made a cash contribution to a qualified charitable organization of $25,000 in cash (not included in any of the above items). What is Lakeview's charitable contribution deduction for the year? Answer: $ . The charitable contribution deduction for corporations is limited to 10% of their taxable income for the year computed without regard to the charitable contribution deduction, net operating loss or capital loss carrybacks, and dividends received deduction. In this course, we are not applying the changes under the CARES Act.
Beech Corporation, an accrual-basis, calendar-year taxpayer, was organized and began business in June of the current calendar tax year. During the current year, the corporation incurred the following expenses: State feeds for incorporation $775 legal and accounting fees incedent to organization 2,713 Expenses for the sale of stock 3,100 Organizational meeting expenses 3,294 Assuming that Beech Corporation wishes to deduct organizational expenses as quickly as possible, calculate the corporation’s deduction for its current calendar tax year.
Tiger Corp is a calendar year taxpayer that elected S status in its first year of operations. Tiger is owned by Harbert (600 shares with beginning AB = $12,000) and Leath (400 shares with beginning AB = $8000). The income statement for Tiger Corp is presented below. The corporation’s beginning AAA balance was -$30,000, OAA was $1,000, and Accumulated E&P from prior years as a C corp was $1,000. Sales Revenue $105,000 Municipal bond income $5,000 Cost of goods sold ($45,000) Salary expense to owners ($20,000) Employee wages ($5,000) Net STCG stock sale $2,000 Depreciation expense ($10,000) Charitable contributions ($1,000) Fines and Penalties ($2,000) Net Income $29,000 Tax depreciation is $15,000 of which $5,000 is Sec. 179 depreciation. Tiger Corp also made a $10,000 distribution. Provide a book-tax reconciliation above and distinguish between ordinary business income (loss) and separately stated items…
Prime Corp. is an accrual basis, calendar year C corporation. Its current year reported book income before federal income taxes was $300,000, which included $17,000 corporate bond interest income. A $20,000 expense for term life insurance premiums on corporate officers was incurred. Prime was the policy owner and beneficiary. What was Prime's current year taxable income as reconciled on Prime's Schedule M-1, Reconciliation of Income (Loss) per Books With Income per Return, of Form 1120, U.S. Corporation Income Tax Return? A. $320,000 B. $300,000 C. $283,000 D. $280,000
Luong Corporation, a calendar year, accrual basis corporation, reported $1.10 million of net income after tax on its financial statements prepared in accordance with GAAP. The corporation's books and records reveal the following information: • Luong's federal income tax expense per books was $202,000. • • • • Luong's book income included $12,000 of dividends received from a domestic corporation in which Luong owns a 25 percent stock interest, and $5,000 of dividends from a domestic corporation in which Luong owns a 5 percent stock interest. Luong recognized $12,000 of capital losses this year and no capital gains. Luong recorded $9,000 of book expense for meals not provided by a restaurant and $11,000 of book expense for entertainment costs. Luong's depreciation expense for book purposes totaled $402,000. MACRS depreciation was $475,000. Required: a. Compute Luong's federal taxable income and regular tax liability. b. Prepare a Schedule M-1, page 6, Form 1120, reconciling Luong's book…
a) Calculate the S corporation's ordinary (non-separately stated) income and indicate which items must be separately stated b) If at the beginning of the year, Archer had a basis of 20,000 compute Archer’s basis at the end of the year. c) Assume that Voyager reported a loss of $70,000 instead (and no separately stated items or distributions). If Janeway had a basis of 10,000 in her stock at the beginning of the year, what is the amount of loss she can report on her return?
Pine Corporation, a calendar-year corporation, was formed three years ago by its sole shareholder, Connor, who has always operated it as a C corporation. However, at the beginning of this year, Connor made a qualifying S election for Pine Corporation, effective January 1. Pine Corporation reported $70,000 of C corporation earnings and profits on the effective date of the S election. This year (its first S corporation year), Pine Corporation reported business income of $50,000. Connor's basis in his Pine Corporation stock at the beginning of the year was $15,000. What are the amount and character of income or gain Connor must recognize on the following alternative distributions, and what is his basis in his Pine Corporation stock at the end of the year? (Leave no answer blank. Enter zero if applicable. Enter N/A if not applicable.) c. Connor received a $130,000 distribution from Pine Corporation at the end of the year. Character Amount Dividend N/A Stock basis
15-7
san
Candlewood LLC started business on December 1, and it adopted a calendar tax year. During the year, Candlewood incurred $10,750 in legal fees for drafting the LLC's operating agreement and $5,375 in accounting fees for tax advice of an organizational nature, for a total of $16,125 of organizational costs. Candlewood also incurred $26,000 of preopening advertising expenses and $27,800 of salaries and training costs for new employees before opening for business, for a total of $53,800 of startup costs. The LLC wants to take the larges deduction available for these costs. If required, round any division to six decimal places and use in subsequent computations. Round your final answers to the nearest dollar. How much can Candlewood deduct as organizational expenses? As startup expenses? The LLC may deduct $ X as organizational expenses and $ as startup expenses.
Determine the amount of taxable income and separately stated items in each of the cases below. Assuming the corporation is a Subchapter S corporation. Ignore any carryforward items. Required: a. Corporate financial statement: net income of $52,750 including tax expense of $15,300, charitable contributions of $3,000, and depreciation expense of $37,450. Depreciation expense for tax purposes is $46,480. b. Corporate financial statement: net income of $140,200 including tax expense of $68,450, charitable contributions of $28,000, depreciation expense of $103,750, and meals expenses of $31,300. Depreciation expense for tax purposes is $145,900. c. Corporate financial statement: net income of $227,350 including tax expense of $111,540, charitable contributions of $16,000, municipal bond interest of $19,390, meals expenses of $41,900, capital gains of $6,150, and depreciation expense of $143,050. Depreciation expense for tax purposes is $131,750, and the corporation has a $7,105 charitable…