Compute the amount of Jackson's current year deductions for the following transactions: a. On November 1 of the current year, it entered into a lease to rent some office space for five years. The lease agreement states that the lease payments are $14,400 per year, payable in advance each November 1 for the following 12-month period. Under the terms of the lease, Jackson is required to pay a $2,500 deposit, refundable upon the termination of the lease. b. On December 1 of the current year, Jackson also renewed its malpractice insurance, paying $39,600 for the three-year contract. c. On December 31 of the current year, Jackson mailed out a check for $2,000 for drafting services performed for it during the current year by an individual who lives in another city. d. On December 31, the firm received a shipment of $1,100 worth of stationery and other office supplies. Jackson has an open charge account with the office supply company, which bills the firm monthly for charges made during the year. e. On December 31, Jackson picked up some work that a local printing company had done for it, which amounted to $1,200. The firm charged the $1,200 with its corporate credit card. (Enter a "0" if no current year deduction is allowed.)
Compute the amount of Jackson's current year deductions for the following transactions: a. On November 1 of the current year, it entered into a lease to rent some office space for five years. The lease agreement states that the lease payments are $14,400 per year, payable in advance each November 1 for the following 12-month period. Under the terms of the lease, Jackson is required to pay a $2,500 deposit, refundable upon the termination of the lease. b. On December 1 of the current year, Jackson also renewed its malpractice insurance, paying $39,600 for the three-year contract. c. On December 31 of the current year, Jackson mailed out a check for $2,000 for drafting services performed for it during the current year by an individual who lives in another city. d. On December 31, the firm received a shipment of $1,100 worth of stationery and other office supplies. Jackson has an open charge account with the office supply company, which bills the firm monthly for charges made during the year. e. On December 31, Jackson picked up some work that a local printing company had done for it, which amounted to $1,200. The firm charged the $1,200 with its corporate credit card. (Enter a "0" if no current year deduction is allowed.)
Chapter16: Accounting Periods And Methods
Section: Chapter Questions
Problem 21CE
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Transcribed Image Text:Jackson, Inc., an engineering consulting firm, uses the cash method of accounting and is a calendar year taxpayer.
Read the requirement.
Compute the amount of Jackson's current year deductions for the following transactions: (Enter a "0" if no current year deduction is allowed.)
a. On November 1 of the current year, it entered into a lease to rent some office space for five years. The lease agreement states
that the lease payments are $14,400 per year, payable in advance each November 1 for the following 12-month period. Under
the terms of the lease, Jackson is required to pay a $2,500 deposit, refundable upon the termination of the lease.
The deduction amount for transaction a. is
Transcribed Image Text:Compute the amount of Jackson's current year deductions for the following
transactions:
a. On November 1 of the current year, it entered into a lease to rent some office
space for five years. The lease agreement states that the lease payments
are $14,400 per year, payable in advance each November 1 for the following
12-month period. Under the terms of the lease, Jackson is required to pay a
$2,500 deposit, refundable upon the termination of the lease.
b.
On December 1 of the current year, Jackson also renewed its malpractice
insurance, paying $39,600 for the three-year contract.
c.
On December 31 of the current year, Jackson mailed out a check for $2,000
for drafting services performed for it during the current year by an individual
who lives in another city.
d. On December 31, the firm received a shipment of $1,100 worth of stationery
and other office supplies. Jackson has an open charge account with the
office supply company, which bills the firm monthly for charges made during
the year.
e. On December 31, Jackson picked up some work that a local printing
company had done for it, which amounted to $1,200. The firm charged the
$1,200 with its corporate credit card.
(Enter a "0" if no current year deduction is allowed.)
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