**Business Expense Calculation for Kim's Trip****Scenario:**Kim works for a clothing manufacturer as a dress designer. During 2020, she travels to New York City to attend five days of fashion shows and spends three days sightseeing. Her expenses are as follows:- **Airfare:** $1,500- **Lodging (8 nights):** $1,920- **Meals (8 days):** $1,440- **Airport transportation:** $120Assume lodging and meals are the same amount for the business and personal portions of the trip ($240 per day for lodging and $180 per day for meals).**Instructions for Calculating Business Expenses:**1. **Airfare (Business Portion):** Enter $1,500 if no reimbursement.2. **Lodging (Business Portion):** Multiply $240 by 5 days.3. **Meals (Business Portion):** Multiply $180 by 5 days.4. **Transportation:** Enter $120 for airport transportation.5. **Total:** Sum the amounts from the above entries.**Tax Deduction:**- Determine the deductible amount on Kim's tax return based on the business expenses with no reimbursements.**Tax Treatment:**- Consider if the tax treatment of Kim's deduction would differ if she were an independent contractor.- Deductible expenses would be entered as a deduction for AGI.**User Interface:**There are input fields and feedback options for each category to ensure accurate calculations and entries.

Concept used: No allocation of airfare for trips within the US. Business portion of meals is subject to 50% limit.a Calculate Kim's business expense presuming no reimbursement as follow: Following shows the calculation: She may deduct $3,270 on her tax return.b) If she was an independent contractor, the tax treatment would remain same and she will deduct $3,270 on her tax return and the expenses would be classified as a deduction for AGI.

Business

Accounting

Kim works for a clothing manufacturer as a dress designer. During 2020, she travels to New York City to attend five days of fashion shows and then spends three days sightseeing. Her expenses are as follows: Airfare $1,500 Lodging (8 nights) 1,920 Meals (8 days) 1,440 Airport transportation 120 Assume lodging/meals are the same amount for the business and personal portion of the trip ($240 per day for lodging and $180 per day for meals). If an amount is zero, enter "0". a. Determine Kim's business expenses, presuming no reimbursement. Airfare X Lodging Meals Transportation Total What amount may she deduct on her tax return? $ X Feedback b. Would the tax treatment of Kim's deduction differ if she was an independent contractor? The deductible expenses on her tax return would be $ X and the expenses would be classified as a deduction for AGI V

Kim works for a clothing manufacturer as a dress designer. During 2020, she travels to New York City to attend five days of fashion shows and then spends three days sightseeing. Her expenses are as follows: Airfare $1,500 Lodging (8 nights) 1,920 Meals (8 days) 1,440 Airport transportation 120 Assume lodging/meals are the same amount for the business and personal portion of the trip ($240 per day for lodging and $180 per day for meals). If an amount is zero, enter "0". a. Determine Kim's business expenses, presuming no reimbursement. Airfare X Lodging Meals Transportation Total What amount may she deduct on her tax return? $ X Feedback b. Would the tax treatment of Kim's deduction differ if she was an independent contractor? The deductible expenses on her tax return would be $ X and the expenses would be classified as a deduction for AGI V

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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