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

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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
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? _________
Trevorson Electronics is a small company privately owned by Jon Trevorson, an electrician whoinstalls wiring in new homes. Because the company’s financial statements are prepared only for taxpurposes, Jon uses the direct write-off method. During 2015, its first year of operations, TrevorsonElectronics sold $30,000 of services on account. The company collected $26,000 of these receivables during the year, and Jon believed that the remaining $4,000 was fully collectible. In 2016,Jon discovered that none of the $4,000 would be collected, so he wrote off the entire amount. Tomake matters worse, Jon sold only $5,000 of services during the year.Required:1. Prepare journal entries to record the transactions in 2015 and 2016.2. Using only the information provided (ignore other operating expenses), prepare comparativeincome statements for 2015 and 2016. Was 2015 really as profitable as indicated by its incomestatement? Was 2016 quite as bad as indicated by its income statement? What should Jon…
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
Drake Appliance Company, an accrual basis taxpayer, sells home appliances and service contracts. Determine the effect of each of the following transac-tions on the company’s 2019 gross income assuming that the company uses any available options to defer its taxes.a. In December 2018, the company received a $1,200 advance payment from a customer for an appliance that Drake special ordered from the manufacturer. The appliance did not arrive from the manufacturer until January 2019, and Drake immediately delivered it to the customer. The sale was reported in 2019 for financial accounting purposes.b. In October 2019, the company sold a 6-month service contract for $240. The company also sold a 36-month service contract for $1,260 in July 2019.c. On December 31, 2019, the company sold an appliance for $1,200. The company received $500 cash and a note from the customer for $700 and $260interest, to be paid at the rate of $40 a month for 24 months. Because of the customer’s poor credit…
A VAT-registered business taxpayer had no inventories at the beginning and end of the quarter. During the third quarter of 2022, it had P75,000 worth of purchases which it sold for P145,800. Should the taxpayer be a non-VAT taxpayer, how much is the minimum invoice to achieve the same level of profit, net of percentage tax?
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Drake Appliance Company, an accrual basis taxpayer, sells home appliances and service contracts. Determine the effect of each of the following transactions on the company's 2023 gross income assuming that the company uses any available options to defer its taxes. Question Content Area a. In December 2022, the company received a $1,200 advance payment from a customer for an appliance that Drake special-ordered from the manufacturer. The appliance did not arrive from the manufacturer until January 2023, and Drake immediately delivered it to the customer. The sale was reported in 2023 for financial accounting purposes. What amount is included in the 2023 gross income?$fill in the blank 7c5329031fb4f9c_1 Question Content Area b. In October 2023, the company sold a 6-month service contract for $240. The company also sold a 36-month service contract for $1,260 in July 2023. Assuming a calendar year-end, what amount is included in the 2023 gross income?$fill in the blank…
Galileo Lantanas, sole proprietor of GALLANT Enterprises, started business operations in 2019 as a non-VAT taxpayer. By the end of the year his sales exceeded P3,000,000 prompting him to register as a VAT taxpayer starting January 2020. The following information appeared in his records as of December 31, 2019: Goods for sale (purchased from VAT suppliers) Inventory value P 120,000 Actual input tax paid 3,500 Supplies used in business (purchased from VAT suppliers) Inventory value P 65,000 Actual input tax paid 1,100 Goods and supplies (purchased from non-VAT suppliers) Inventory value P 35,000 Cost 30,000 For the month of January 2020, sales and purchases amounted to P650,000 and P330,000, respectively, VAT not yet included. How much is the VAT payable as at January 31, 2020?
On November 1, 2020 Mr. Raul Ferrer a VAT registered taxpayer made the following purchases from VAT seller for use in his business. The amounts stated not including value- added taxes: Machine 1 with a useful life of 6 years. Machine 2 with a useful life of 3 years. Machine 3 with a useful life of 2 years... How much is the input VAT available to Mr. Ferrer for the month of November? P2,850,000 1,710,000 570,000

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