Jim may claim a bad-debt expense deduction on his 2022 taxes for the $2,500 of uncollectible receivable.
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- Window World extended credit to customer Nile Jenkins in the amount of $135,900 for his purchase of window treatments on April 2. Terms of the sale are n/150. The cost of the purchase to Window World is $57,200. On September 4, Window World determined that Nile Jenkins's account was uncollectible and wrote off the debt. On December 3, Mr. Jenkins unexpectedly paid in full on his account. Record each Window World transaction with Nile Jenkins. In order to demonstrate the write-off and then subsequent collection of an account receivable, assume in this example that Window World rarely extends credit directly, so this transaction is permitted to use the direct write-off method. Remember, however, that in most cases the direct write-off method is not allowed. If an amount box does not require an entry, leave it blank. Apr. 2 Accounts Receivable: Jenkins Accounts Receivable: Jenkins Sales Revenue Sales Revenue To record sale, n/150 Apr. 2 Cost of Goods Sold…6. During 2019, Reed Corporation sold merchandise for a total of $900,000. The cost of merchandise to Reed was $675,000. Reed offers credit terms of 1/10, n/30 to encourage early payment. At year-end, there are $22,500 of sales still eligible for the 1% discount. Reed believes that all of the companies will pay within the discount period to receive the 1% discount. Assume Reed's fiscal year is December 31. Reed's adjusting journal entry will include: A) A debit to Sales Discounts for $225 B) A credit to Allowance for Sales Discounts for $2,250 C) A debit to Sales Discounts for $2,050 D) A credit to Sales Discounts for $225 E) No adjusting journal entry is required. Discount will be recognized when payment is received.Michelle operates several food trucks. Indicate the amount (if any) that she can deduct as an ordinary and necessary business deduction in each of the following situations. Note: Leave no answers blank. Enter zero if applicable. a. Michelle moves her food truck between various locations on a daily rotation. Last week, Michelle was stopped for speeding. She paid a fine of $160 for speeding, including $115 for legal advice in connection with the ticket. b. Michelle paid $785 to reserve a parking place for her food truck for the fall football season outside the local football stadium. Michelle also paid $130 for tickets to a game for her children. c. Michelle provided a candidate with free advertising painted on her truck during the candidate's campaign for city council. Michelle paid $640 to have the ad prepared and an additional $340 to have the ad removed from the truck after the candidate lost the election. d. Michelle realized a $1,235 loss when she sold one of her food trucks to her…
- Cassi (SSN 412-34-5670) has a cash-basis home cleaning business she runs as a sole proprietorship. The following are the results from business operations for the tax year 2019: Gross receipts $ 203,000 Business mileage: 27,000 (miles incurred ratably throughout the year) 35,000 miles total during the year 2019 Van (over 6,000 lbs) placed in service 1/01/19, cost 27,000 Postage (500 ) Wages (26,000 ) Payroll taxes (1,950 ) Supplies (12,500 ) Phone (1,250 ) Internet service (600 ) Rent (2,400 ) Insurance (2,800 ) Van expenses (4,500 ) Business assets Date Purchased Cost Computer 1 5/18/19 $ 2,200 Computer 2 6/01/19 2,700 Printer 3/01/18 900 Copier 3/02/18 2,100 Furniture 3/01/18 6,000 Required: Determine Cassi’s self-employment income and QBI deduction. Prepare Schedule C and Schedule SE. § 179 expense is elected on all eligible assets (§ 179 was not taken on assets…Khali owns two commercial buildings in downtown Sheridan. XYZ Company expressed an interest in one of the properties. They would like to rent the building for five years. Anxious to close the deal, Khali tells XYZ Company he will provide a significant discount on the first two years of rent, if XYZ Company pays in advance. XYZ Company agrees. On November 15, Khali receives XYZ’s security deposit in the amount of $2,500 that is refundable at the end of the lease period. A check in the amount of $30,000, covering the first two years of rent arrives on December 1, 2022. How much rental income must Khali include on his 2022 tax return?devin and merri sign the loan documents on March 23 and are required to deposit 324 into the escrow account at that time. their first payment is due may 1. the lender pays property taxes of 1,144. from their escrow account on November 22. calculate their escrow balance at the end of the calendar year.
- Johnson Inc. has the following information available: On November 1, 20X1, Johnson lent $15,000 cash to one of its employees. The employee signed a one-year, 12%, promissory note. The note's principal plus interest is repaid to Johnson on November 1, 20X2. Interest calculations are rounded to the nearest whole month. Prepare journal entries to record the November 1, 20X1 transaction, the adjusting entry on 12/31/X1, and the November 1, 20X2 transaction.During 2021, Harry, a self-employed accountant, travels from Kansas City to Miami for a seven-day business trip. While in Miami, Harry decides to stay for an additional 5 days of vacation. Harry pays $600 for airfare, $200 for restaurant meals, and $500 for lodging while on business. The cost of meals and lodging while on vacation was $300 and $500, respectively. How much may Harry deduct as travel expenses for the trip?On August 2, Jun Co. receives a $7,500, 90-day, 14.0% note from customer Ryan Albany as payment on his $7,500 account. Prepare Jun's journal entry assuming the note is honored by the customer on October 31 of that same year. (Round your answers to nearest whole dollar value. Use 360 days a year.)
- Charlie is in the business of sharpening skates for youth hockey programs. He signed a contract on September 1, 2020 for $35,000 with the Waltham Hockey League to sharpen the team’s skates for the 2020-2021 hockey season, which is played from the months of September 2020 through March 2021. The contract states that the Waltham Hockey League will pay Charlie a deposit of $3,000 on September 1, 2020, $10,000 on October 31, 2020, $10,000 on December 31, 2020 and the remaining $12,000 on March 31, 2021. Charlie performed the services as contracted throughout the hockey season and contract period. What was the amount of revenue Charlie should recognize for the year-end December 31, 2020 on the Waltham Hockey League contract? a. $35,000 b. $10,000 c. $23,000 d. $20,00028. David is in the business of sharpening skates for college hockey teams. He signed a contract on August 1, 2019 for $28,000 with Bentley University ("Bentley") to sharpen the team's skates for the 2019-2020 hockey season, which is played from the months of September 2019 through March 2020. The contract states that Bentley will pay David a deposit of $8,000 on August 31, 2019, $8,000 on October 31, 2019, $4,000 on December 31, 2019 and the remaining $8,000 on March 31, 2020. David performed the services as contracted throughout the hockey season. What was the amount of revenue David should recognize for year-end December 31, 2019 on the Bentley contract? A. $0 B. $16,000 C. $20,000 D. $28,000 29. Katelyn's Catering, Inc. ("Katelyn") provides gourmet appetizers for corporate functions. For the month of January 2020, Katelyn had the following events occur in its business: 1) Katelyn incurred and paid salaries for their wait staff and chefs of $10,000; 2) Katelyn paid their food…The following transactions occurred during December 31, 2021, for the Microchip Company. On October 1, 2021, Microchip lent $90,000 to another company. A note was signed with principal and 8% interest to be paid on September 30, 2022. On November 1, 2021, the company paid its landlord $6,000 representing rent for the months of November through January. Prepaid rent was debited. On August 1, 2021, collected $12,000 in advance rent from another company that is renting a portion of Microchip’s factory. The $12,000 represents one year’s rent and the entire amount was credited to deferred rent revenue. Depreciation on office equipment is $4,500 for the year. Vacation pay for the year that had been earned by employees but not paid to them or recorded is $8,000. The company records vacation pay as salaries expense. Microchip began the year with $2,000 in its asset account, supplies. During the year, $6,500 in supplies were purchased and debited to supplies. At year-end, supplies costing…
