provide short and simple answer in this account questions Downum Taffetas, Inc. is an accrual method taxpayer thatuses the calendar year as its tax year. The company sold anddelivered $1,000 of taffeta sheets to a customer onDecember 20, 2015, but was not paid for the sale untilJanuary 18, 2016. The cost of the goods sold was $250. Thedelivery of tin sheets cost $50 but the company did not paythe delivery charge until January 12, 2016. Based on thesefacts, what is the company's taxable income for 2015?

Step 1: Recognize RevenueDownum Taffetas is an accrual method taxpayer, which means income is…

Answered: Downum Taffetas, Inc. is an accrual…

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter16: Accounting Periods And Methods

Section: Chapter Questions

Problem 33P

See similar textbooks

Similar questions

How do the all events and economic performance requirements apply to the following transactions by an accrual basis taxpayer? a. The company guarantees its products for six months. At the end of 2019, customers had made valid claims for 600,000 that were not paid until 2020. Also, the company estimates that another 400,000 in claims from 2019 sales will be filed and paid in 2020. b. The accrual basis taxpayer reported 200,000 in corporate taxable income for 2019. The state income tax rate was 6%. The corporation paid 7,000 in estimated state income taxes in 2019 and paid 2,000 on 2018 state income taxes when it filed its 2018 state income tax return in March 2019. The company filed its 2019 state income tax return in March 2020 and paid the remaining 5,000 of its 2019 state income tax liability. c. An employee was involved in an accident while making a sales call. The company paid the injured victim 15,000 in 2019 and agreed to pay the victim 15,000 a year for the next nine years.
LSG Company is a calendar year, cash basis taxpayer. On November 1, 2018, LSG paid $9,450 cash to the janitorial service firm that cleans LSG’s administrative offices and retail stores. How much of this expenditure can LSG deduct in 2018 assuming that the expenditure is a prepayment for 18 months of cleaning services from November 2018 through April 2020?
The following is an example of a recurring expense which is deductible by a calendar-year taxpayer in full in the year of payment: (a.) The taxpayer purchases six months of business insurance on September 15, 2016 for a cost of $800. (b.) The taxpayer pays $10,000 for two years of rent for the office building in advance. (c.) Taxpayer pays a consultant $15,000 to perform a marketing study that will not be completed for 18 months. (d.) Taxpayer pays his attorney a retainer fee of $10,000 for ongoing litigation costs in a product liability lawsuit
None
LSG Company is a calendar year, cash basis taxpayer. On November 1, 2021, LSG paid $9,450 to the janitorial service that cleans their offices. How much of this expenditure can LSG deduct in 2021 assuming that: The expenditure is a prepayment for 6 months of cleaning services from November 2021 through April 2022? _____________________________________________________________________________________ _____________________________________________________________________________________ The expenditure is a prepayment for 18 months of cleaning services from November 2021 through April 2023? _________
Big Homes Corporation is an accrual-method calendar-year taxpeyer that manufactures and sells modular homes This yea, for the first time Big Homes was forced to offer a rebate on the purchase of new homes. At year-end, Big Homes had paid $13,300 in rebates and was liable for an additional $8,150 in rebates to buyers. What amount of the rebates, f any, can Big Homes deduct this year? Multiple Choice $13.300 because the $8,150 liatilty s not fied and determinable su.300 because rebates are payment labintes s2s0 vecaute y Hames is an acerue method tapayer Big Hames is not entted to a deduction because rebates are egainst pubic poicy $21450 is amaunt is not matenal, Big Homes expects to continue the prectice of offering rebetes in future years, and Big Homes expecta to pay the accrued rebates before ting its tax return for this year
Hillcrest Limited used the standard option to calculate provisional tax the 2018 tax year. The RIT for the 2017 tax year was $120,000. The company paid all instalments on time. When the company’s accountant filed the company's 2018 tax return on 7 July 2018, he calculated RIT of $192,000. The accountant got the balance from the myIR secure online services account on 9 September 2018 and paid the end-of-year tax and interest right away. IRD charged the interest at a rate of 9.21% to 7 May 2018 and then 8.27% as late payment after 7 May 2018. Calculate the 2018 provisional tax and the instalments on the instalment dates and the payment or refund on 9 September 2018.
Wolfpack Inc., a calendar year-end company, pays its employees on the last day of the month for work performed during the month. Gross salaries for the month of April are $20,000. Wolfpack withholds the following amounts from its employees’ paychecks for this pay period: federal income tax of $4,000 state income tax of $2,500 FICA tax of $1,530 Tax withholding are not remitted to the proper tax agencies until the 10th of the following month. Required: Answer the following two questions. Note: Do not include decimals or cents in your response. Question #1: The entry to record the payment of salaries on April 30 should include a debit to the "Salaries Expense" account for how much? Answer: Question #2: The entry to record the payment of salaries on April 30 should include a credit to the "Cash" account for how much? Answer:
Wolfpack Inc., a calendar year-end company, pays its employees on the last day of the month for work performed during the month. Gross salaries for the month of April are $20,000. Wolfpack withholds the following amounts from its employees’ paychecks for this pay period: federal income tax of $4,000 state income tax of $2,500 FICA tax of $1,530 Tax withholding are not remitted to the proper tax agencies until the 10th of the following month. Required: Answer the following two questions. Note: Do not include decimals or cents in your response. Question #1: The entry to record the payment of salaries on April 30 should include a debit to the "Salaries Expense" account for how much? Answer: $Answer. Question #2: The entry to record the payment of salaries on April 30 should include a credit to the "Cash" account for how much? Answer: $Answer
The Nissen Company has a taxation year end of December 31. On January 1, taxation year the UCC of Class 10 was $60,000. The Nissen Company has a policy of always deducting maximum CCA. Calculate the maximum CCA or minimum UCC in the following situations (each situation is independent): Remember that CCA is an optional amount meaning that a taxpayer can choose CCA of anywhere between zero and the amount calculated. The maximum CCA would be the amount calculated, which would result in the lowest UCC at the ending of the year. C. An asset with a capital cost of $100,000 was sold June 30 for $80,000. An asset was purchased for $60,000. Maximum CCA for Class 10 is: D. The last asset in the class, with a capital cost of $105,000 was sold on August 1 for $40,000. This would give rise to: E. The last asset in the class, with a capital cost of $105,000 was sold on July 15 for $125,000. This would give rise to: A. An asset was purchased on April 1 for $10,000. B. An asset was purchased on April…
According to Tax Accounting rules, which of the following expenses have been incurred (and thus fully deductible) during the 2020 financial year? Select one: Invoice of $2,000 handed to a rental property owner on 29 June 2020. All paint work has been completed. The Invoice has not been paid.On 29 June 2020, one of ABC Pty Ltd's employees notified the company that she might be taking long service leave for the whole of November and December 2020On 29 June 2020, GHD Pty Ltd contacted SpotLess Pty Ltd about providing cleaning services to its head office. GHD Pty Ltd is fairly sure it will hire SpotLess Pty Ltd, yet is still waiting on a quoteOn 29 June 2020, KLM Pty Ltd had doubts whether an outstanding debt would be paid. The debt is finally written off on 5 July 2020On 29 June 2020, XYZ Pty Ltd pre-paid $25,000 for IT support services that would be rendered to the company over a five year period
Flint Enterprises Ltd., a private company following ASPE earned accounting income before taxes of $1,712,000 for the year ended December 31, 2020. During 2020, Flint paid $240,000 for meals and entertainment expenses. In 2017, Flint’s tax accountant made a mistake when preparing the company’s income tax return. In 2020, Flint paid $17,000 in penalties related to this error. These penalties were not deductible for tax purposes. Flint owned a warehouse building for which it had no current use, so the company chose to use the building as a rental property. At the beginning of 2020, Flint rented the building to SPK Inc. for two years at $260,000 per year. SPK paid the entire two years’ rent in advance. Flint used the straight-line depreciation method for accounting purposes and recorded depreciation expense of $396,000. For tax purposes, Flint claimed the maximum capital cost allowance of $621,000. Flint began to sell its products with a two-year warranty against manufacturing…

SEE MORE QUESTIONS

Recommended textbooks for you

SWFT Comprehensive Volume 2019

Accounting

ISBN:

9780357233306

Author:

Maloney

Publisher:

Cengage

Individual Income Taxes

Accounting

ISBN:

9780357109731

Author:

Hoffman

Publisher:

CENGAGE LEARNING - CONSIGNMENT

SWFT Comprehensive Vol 2020

Accounting

ISBN:

9780357391723

Author:

Maloney

Publisher:

Cengage

SWFT Comprehensive Volume 2019

Accounting

ISBN:

9780357233306

Author:

Maloney

Publisher:

Cengage

Individual Income Taxes

Accounting

ISBN:

9780357109731

Author:

Hoffman

Publisher:

CENGAGE LEARNING - CONSIGNMENT

SWFT Comprehensive Vol 2020

Accounting

ISBN:

9780357391723

Author:

Maloney

Publisher:

Cengage

SWFT Individual Income Taxes

Accounting

ISBN:

9780357391365

Author:

YOUNG

Publisher:

Cengage

CONCEPTS IN FED.TAX., 2020-W/ACCESS

Accounting

ISBN:

9780357110362

Author:

Murphy

Publisher:

CENGAGE L

SWFT Essntl Tax Individ/Bus Entities 2020

Accounting

ISBN:

9780357391266

Author:

Nellen

Publisher:

Cengage

SEE MORE TEXTBOOKS