tekabhai Exercise 5-1 (Algo) Computing the CM Ratio and Variable Expense Ratio [LO5-1]Last month when Holiday Creations, Incorporated, sold 38,000 units, its sales, variable expenses, and fixed expenses were $152,000,$107,920, and $38,200, respectively.Required:1. What is the company's contribution margin (CM) ratio?2. What is the company's variable expense ratio?Note: Do not round intermediate calculations.1. Contribution margin ratio2 Variable expense ratio%% The 2023 standard deduction is $13,850 for single filers and those married filing separately, $27,700 for those marriedfiling jointly, and $20,800 for heads of household.Required information[The following information applies to the questions displayed below.]Amelie, a retired physician, is 66 years old. Determine her standard deduction in 2023 under the following scenarios.a. Amelie is married to Roget, age 52, and they file jointly.Standard deduction

Hi studentSince there are multiple questions, we will answer only first question.Variable expense…

Answered: Exercise 5-1 (Algo) Computing the CM…

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter9: Individuals As Taxpayers

Section: Chapter Questions

Problem 15P

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Paul and Sonja, who are married, had itemized deductions of 13,200 and 400, respectively, during 2019. Paul suggests that they file separatelyhe will itemize his deductions from AGI, and she will claim the standard deduction. a. Evaluate Pauls suggestion. b. What should they do?
Samuel and Annamaria are married, file a joint return, and have three qualifying children. In 2019, they earn wages of 34,000 and no other income. Determine the amount of their earned income credit for 2019.
Alton Newman, age 67, is married and files a joint return with his wife, Clair, age 65. Alton and Clair are both retired, and during 2018, they received Social Security benefits of 10,000. Both Alton and Clair are covered by Medicare. Altons Social Security number is 111-11-1119, and Clairs is 123-45-6786. They reside at 210 College Drive, Columbia, SC 29201. Alton, who retired on January 1, 2018, receives benefits from a qualified pension plan of 2,750 a month for life. His total contributions to the plan (none of which were deductible) were 168,250. In January 2018, he received a bonus of 2,000 from his former employer for service performed in 2017. No income taxes were withheld on this bonus by his former employer (Amalgamated Industries, Inc.; EIN 12-3456789; 114 Main Street, Columbia, SC 29201). Although Amalgamated Industries, Inc., accrued the bonus in 2017, it was not paid until 2018. Clair, who retired on December 31, 2017, started receiving benefits of 1,400 a month on January 1, 2018. Her contributions to the qualified pension plan (none of which were deductible) were 74,100. On September 27, 2018, Alton and Clair received a pro rata 10% stock dividend on 600 shares of stock they owned. They had bought the stock on March 5, 2011, for 20 a share. On December 16, 2018, they sold the 60 dividend shares for 55 a share. On October 10, 2018, Clair sold the car she had used in commuting to and from work for 17,000. She had paid 31,000 for the car in 2012. On July 14, 2010, Alton and Clair received a gift of 1,000 shares of stock from their son, Thomas. Thomass basis in the stock was 35 a share (fair market value at the date of gift was 25). No gift tax was paid on the transfer. Alton and Clair sold the stock on October 8, 2018, for 24 a share. On May 1, 2018, Clairs mother died, and Clair inherited her personal residence. In February 2018, her mother had paid the property taxes for 2018 of 2,100. The residence had a fair market value of 235,000 and an adjusted basis to the mother of 160,000 on the date of her death. Clair listed the house with a real estate agent, who estimated it was worth 240,000 as of December 31, 2018. Clair received rent income of 6,000 on a beach house she inherited three years ago from her uncle Charles. She had rented the property for one week during the July 4 holiday and one week during the Thanksgiving holiday. Charless adjusted basis in the beach house was 150,000, and its fair market value on the date of his death was 240,000. Clair and Alton used the beach house for personal purposes for 56 days during the year. Expenses associated with the house were 3,700 for utilities, maintenance, and repairs; 2,200 for property taxes; and 800 for insurance. There are no mortgages on the property. Clair and Alton paid estimated Federal income tax of 2,000 and had itemized deductions of 6,800 (excluding any itemized deductions associated with the beach house). If they have overpaid their Federal income tax, they want the amount refunded. Both Clair and Alton want 3 to go to the Presidential Election Campaign Fund. Compute their net tax payable or refund due for 2018, using the appropriate tax rate schedule (not the Tax Tables). If you use tax forms for your computations, you will need at a minimum Form 1040 and Schedule D. Suggested software: ProConnect Tax Online.
Sammy and Monica, both age 67, incur and pay medical expenses in excess of insurance reimbursements during the year as follows. Sammy and Monicas 2019 AGI is 130,000. They file a joint return. Chuck and Carter are Sammy and Monicas dependents. a. What is Sammy and Monicas medical expense deduction for regular income-tax purposes? b. What is Sammy and Monica's AMT adjustment for medical expenses?
In 2019, Lou has a salary of $53,300 from her job. She also has interest income of $1,600 and dividend income of $ 400. Lou is single and has no dependents. During the year, Lou sold silver coins held as an investment for a $7,000 loss. Calculate the following amounts for Lou: Adjusted gross income $ ____________________ Standard deduction $ ____________________ Taxable income $ ____________________
LO.2 During 2019, Susan incurred and paid the following expenses for Beth (her daughter), Ed (her father), and herself: Beth qualifies as Susans dependent, and Ed would also qualify except that he receives 7,400 of taxable retirement benefits from his former employer. Beths psychiatrist recommended Red River Academy because of its small classes and specialized psychiatric treatment program that is needed to treat Beths illness. Ed, who is a paraplegic and diabetic, entered Heartland in October. Heartland offers the type of care that he requires. Upon the recommendation of a physician, Susan has an air filtration system installed in her personal residence. She suffers from severe allergies. In connection with this equipment, Susan incurs and pays the following amounts during the year: The system has an estimated useful life of 10 years. The appraisal was to determine the value of Susans residence with and without the system. The appraisal states that the system increased the value of Susans residence by 2,200. Ignoring the AGI floor, what is the total of Susans expenses that qualifies for the medical expense deduction?
Freda is a cash basis taxpayer. In 2019, she negotiated her salary for 2020. Her employer offered to pay her 21,000 per month in 2020 for a total of 252,000. Freda countered that she would accept 10,000 each month for the 12 months in 2020 and the remaining 132,000 in January 2021. The employer accepted Fredas terms for 2020 and 2021. a. Did Freda actually or constructively receive 252,000 in 2020? b. What could explain Fredas willingness to spread her salary over a longer period of time? c. In December 2020, after Freda had earned the right to collect the 132,000 in 2020, the employer offered 133,000 to Freda at that time, rather than 132,000 in January 2021. The employer wanted to make the early payment so as to deduct the expense in 2020. Freda rejected the employers offer. Was Freda in constructive receipt of the income in 2020? Explain.
Alicia and Rafel are in the process of negotiating a divorce agreement to be finalized in 2019. They both worked during the marriage and contributed an equal amount to the marital assets. They own a home with a fair market value of 400,000 (cost of 300,000) that is subject to a mortgage of 250,000. They have lived in the home for 12 years. They also have investment assets with a cost of 160,000 and a fair market value of 410,000. Thus, the net worth of the couple is 560,000 (400,000 250,000 + 410,000). The holding period for the investments is longer than one year. Alicia would like to continue to live in the house. Therefore, she has proposed that she receive the residence subject to the mortgage, a net value of 150,000. In addition, she would receive 17,600 each year for the next 10 years, which has a present value (at 6% interest) of 130,000. Rafel would receive the investment assets. If Rafel accepts this plan, he must sell one-half of the investments so that he can purchase a home. Assume that you are counseling Alicia. Explain to Alicia whether the proposed agreement would be fair on an after-tax basis.

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