John Pickens writes mystery novels. His publisher pays him royalties for the number of books sold each year. He is paid royalties for the first half of the year on September 30 and the second half of the year on March 31 of the following year. He received $42,000 in September, 2022. The publisher estimated that his royalties for the second half of the year would be $53,000. On March 31, 2023, he received $57,500. Assuming that he recorded $53,000 in royalties at December 31, 2022, how would you account for this change? Group of answer choices as a change in accounting principle as a prior period error correction as an error as a change in estimate

John Pickens writes mystery novels. His publisher pays him royalties for the number of books sold each year. He is paid royalties for the first half of the year on September 30 and the second half of the year on March 31 of the following year. He received $42,000 in September, 2022. The publisher estimated that his royalties for the second half of the year would be $53,000. On March 31, 2023, he received $57,500. Assuming that he recorded $53,000 in royalties at December 31, 2022, how would you account for this change? Group of answer choices as a change in accounting principle as a prior period error correction as an error as a change in estimate

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

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter9: Acquisitions Of Property

Section: Chapter Questions

Problem 34P

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On January 1, 2023, Mr. Packard receives a $135,000 loan from his employer to assist him in purchasing a home. The loan requires annual interest at a rate of 3.1%, which he pays on December 31, 2023. Assume that the relevant prescribed rate is 5% during the first quarter of 2023, 6% during the second quarter, and 4%. What is the amount that Mr. Packard's is required to add to his 2023 employment income as a result of the employee loan?
On 1 July 2019 Richard bought a rental property for $920,000. He borrowed $630,000 on the same day from the bank to buy the property. The term of the loan was 4 years. The property was leased on 1 July 2019. He received rent in cash from his tenants during the year ended 30 June 2020 in the amount of $95,000. Included in this amount was a payment of $11,000 on 28 June 2020 as rent for the month of July 2020. He also received $80,000 in wages working for a Real Estate company. He has no deductions apart from interest on the loan of $24,000 for the year ended 30 June 2020. Required: Explain the relevant legal provisions and calculate Richard’s income tax for the year ended 30 June 2020.
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