Check all details and answer me. Sub. Financial account Bigham Corporation, an accrual basis calendar yeartaxpayer, sells its services under 12-month and 24-monthcontracts. The corporation provides services to eachcustomer every month. On July 1, 2017, Bigham sold thefollowing customer contracts:Length of contract Total Proceeds12 months24 months$ 25,600$51,200Determine the income to be recognized in taxable incomein 2017 and 2018.

To determine the income to be recognized in 2017 and 2018, we follow the accrual basis rules for…

Answered: Bigham Corporation, an accrual basis…

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter4: Gross Income: Concepts And Inclusions

Section: Chapter Questions

Problem 22CE

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On January 1, 2019, Mopps Corp. agrees to provide Conklin Company 3 years of cleaning and janitorial services. The contract sets the price at 12,000 per year, which is the normal standalone price that Mopps charges. On December 31, 2020, Mopps and Conklin agree to modify the contract. Mopps reduces the fee for the third year to 10,000, and Conklin agrees to a 4-year extension that will extend services through December 31, 2024, at a price of 15,000 per year. At the time that the contract is modified, Mopps is charging other customers 13,500 for the cleaning and janitorial service. Required: Should Mopps and Conklin treat the modification as a separate contract? If so how should Mopps account for the contract modification on December 31, 2020? Support your opinion by discussing the application to this case of the factors that need to be considered for determining the accounting for contract modifications.
On October 1, 2019, Grahams WeedFeed Inc. signs a contract to maintain the grounds for BigData Corp. The contract ends on March 31, 2020, and has a monthly payment of 3,200. The contract does not include any stipulations for additional periods. On June 1, Grahams WeedFeed and BigData sign a new 12-month contract that is retroactive to April 1, 2020. The monthly fee for the new contract is 4,000 per month and is also retroactive to April 1, 2020. During April and May of 2020, while the new contract was being negotiated, Grahams Weed Feed continued to maintain the grounds, and BigData continued to pay 3,200 per month. BigData was satisfied with Grahams WeedFeeds performance, and the only issue during negotiations was the monthly fee. Required: Determine if a valid contract exists between Grahams WeedFeed and BigData during April and May 2020.
Bigham Corporation, an accrual basis calendar year taxpayer, sells its services under 12-month and 24-month contracts. The corporation provides services to each customer every month. On July 1, 2019, Bigham sold the following customer contracts: Determine the income to be recognized in taxable income in 2019 and 2020.
Spath Company borrows 75,000 by issuing a 4-year, noninterest-bearing note to a customer on January 1, 2019. In addition, Spath agrees to sell inventory to the customer at reduced prices over a 5-year period. Spaths incremental borrowing rate is 12%. The customer agrees to purchase an equal amount of inventory each year over the 5-year period so that a straight-line method of revenue recognition is appropriate. Required: Prepare the journal entries on Spaths books for 2019 and 2020. (Round answers to 2 decimal places.)
Bigham Corporation, an accrual basis calendar year taxpayer, sells its services under 12-month, and 24-month contracts. The corporation provides services to each customer every month. On July 1, 2021, Bigham sold the following customer contracts: Length of contract Total Proceeds 12 months $14,000 24 months $24,000 Determine the income to be recognized in 2021 and 2022. Length of Contract 2021 Income 2022 Income 12 months $fill in the blank 1 $fill in the blank 2 24 months $fill in the blank 3 $fill in the blank 4
Subject - account Please help me. Thankyou.
Sheridan Inc., a real estate developing company, was accounting for its long-term contracts using the completed contract method prior to 2018. In 2018, it changed to the percentage-of-completion method.The company decided to use the same for income tax purposes. The tax rate enacted is 40%. Income before taxes under both the methods for the past three years appears below. 2016 2017 2018 Completed contract $415000 $279000 $143000 Percentage-of-completion 715000 347000 235000 Which of the following will be included in the journal entry made by Sheridan to record the income effect? Question 14 options: a) A credit to Retained Earnings for $208,200. b) A debit to Retained Earnings for $140,200. c) A credit to Retained Earnings for $140,200. d) A debit to Retained Earnings for $229,200
Sarsuela Co. at the end of 2022, its first year of operation, prepared reconciliation between pretax financial income and taxable income as follows: Pretax financial income P400,000 Estimated litigation expense 1,000,000 Installment sales (800,000) Taxable income P600,000 The estimated litigation expenses of P1,000,000 will be deductible in 2023 when it is expected to be paid. The gross profit from installment sales will be realized in the amount of P500,000 and P300,000 each of the next two years. The income tax rate is 30% in current year and 32% in 2023 and 33% in 2024 were enacted for future years. TRUE OR FALSE Statement 1: The net income after tax for the period ending December 31, 2022 is P660,000. Statement 2: Total income tax expense for the period ending December 31, 2022 is P120,000
XYZ Co. at the end of 2018, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows: Pretax financial income € 750,000 Estimated expenses deductible for taxes when paid 1,200,000 Extra depreciation (1,350,000) Taxable income € 600,000 Estimated warranty expense of €800,000 will be deductible in 2019, €300,000 in 2020, and €100,000 in 2021. The use of the depreciable assets will result in taxable amounts of €450,000 in each of the next three years. Instructions (a) Prepare a table of future taxable and deductible amounts. (b) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2018, assuming an income tax rate of 40% for all years.
Sheridan Company made the following journal entry in late 2021 for rent on property it leases to Danford Corporation. Cash 143000 Unearned Rent Revenue 143000 The payment represents rent for the years 2022 and 2023, the period covered by the lease. Sheridan Company is a cash basis taxpayer. Sheridan has income tax payable of $223000 at the end of 2021, and its tax rate is 25%.Assuming the income taxes payable at the end of 2022 is $248000, what amount of income tax expense would Sheridan Company record for 2022?
On January 1, 2024, Hampton's Construction, Inc. decided to change from the completed-contract method of accounting to the percentage-of-completion method. Hampton will continue to use the completed-contract method for income tax purposes. The following information is available for net income. The income tax rate for all years is 35%.Net Income Year Ended Percentage of Completion Completed Contract December 31, 2022 $145,000 $125,000 December 31, 2023 179,000 159,000 December 31, 2024 267,000 181,000 What is the journal entry to record the change in accounting principle on January 1, 2024? Group of answer choices Retained Earnings 55,900 Deferred Tax Asset 30,100 Construction in Progress86,000 Construction in Progress 40,000 Retained Earnings 40,000 No entry needed. Construction in Progress 40,000 Deferred Tax Liability 14,000 Retained Earnings26,000
ABC Inc. began operations on July 1,2019. The company recognizes income from long term construction contracts under the percentage of completion method in its financial statements and under the cost recovery method for income tax purposes. Income under each are as follows: 2019 Cost recovery- P 0 % of completion- P 700,000 2020 Cost recovery- P 800,000 % of completion- P 1,280,000 2021 Cost recovery- P 1,350,000 % of completion- P 1,700,000 The income tax rate was 32% for 2019. Based on a new law, for years after 2019, the tax rate is 34%. There are no other temporary differences. ABC should report in its December 31,2021 a deferred tax liability of

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