what is Lisa's capital balance at the end the year? Lisa's Pet Grooming Service, a sole proprietorship, began the year with totalassets of $75,000 and total liabilities of $48,500. During the year, the businessrecorded $120,000 in service revenue, $72,500 in expenses, and Lisa withdrew$15,000 for personal use.What is Lisa's capital balance at the end of the year?A) $59,000B) $45,000C) $38,000D) $54,000

Step 1: Definition of Owner's Capital BalanceThe owner's capital balance represents the equity…

Answered: Lisa's Pet Grooming Service, a sole…

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter11: Invest Or Losses

Section: Chapter Questions

Problem 39P

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During the last five months of the year, Dwana opens a new Internet telecommunications business called Dwan-Com. Dwan-Com bills 50,000 of revenues, but receives only 40,000 cash. Dwan-Com incurs 3,000 of supply expenses, and 41,000 of labor costs. Dwan-Com pays for 2,200 of the supplies and 38,000 of the labor costs in the current year. a. What is Dwan-Coms taxable income if it elects the cash method of accounting? b. What is Dwan-Coms taxable income if it elects the accrual method of accounting? c. What method of accounting do you recommend that Dwan-Com elect?
During the year (not a leap year), Anna rented her vacation home for 30 days, used it personally for 20 days, and left it vacant for 315 days. She had the following income and expenses: Rent income $ 7,000 Expenses Real estate taxes 2,500 Interest on mortgage 9,000 Utilities 2,400 Repairs 1,000 Roof replacement (a capital expenditure) 12,000 Depreciation 7,500 Compute Anna’s net rent income or loss and the amounts she can itemize on her tax return, using the court’s approach to allocating property taxes and interest. How would your answer in part (a) differ using the IRS’s method of allocating property taxes and interest?
Mrs. V paid the following expenditures in the current year. Interest on line of credit ($20,000 outstanding for the entire year) $1,000 Investment management fees for her registered retirement savings plan 6,000 Investment management fees for her non-registered investments 800 Legal fees related to the acquisition of a rental property 1,200 The line of credit is mostly for the purchase of non-registered investments, made several years ago. All of the investments are still owned. However, $5,000 of the total outstanding principal was used to renovate her home last year. The rental property was purchased late in the year. No rental income was received in the year. What is the total amount that she can deduct on her personal income tax return for the current year, in respect of these expenditures? A. 1,550 B. 1,800 C. 2,750 D. 3,000
Mrs. V paid the following expenditures in the current year. Interest on line of credit ($20,000 outstanding for the entire year) Investment management fees for her registered retirement savings plan Investment management fees for her non-registered investments Legal fees related to the acquisition of a rental property $1,550 $1,000 The line of credit is mostly for the purchase of non-registered investments, made several years ago. All of the investments are still owned. However, $5,000 of the total outstanding principal was used to renovate her home last year. O $1,800 6,000 The rental property was purchased late in the year. No rental income was received in the year. O $2,750 800 What is the total amount that she can deduct on her personal income tax return for the current year, in respect of these expenditures? O $3,000 1,200
Stan, a computer lab manager, earns a salary of $80,000 and receives $25,000 in dividends and interest during the year. In addition, he incurs a loss of $40,000 from an investment in a passive activity. His at-risk amount in the activity at the beginning of the year is $55,000. What is Stan’s adjusted gross income for this year?
1. Salvatore, an investor-broker, earns $195,000 from his practice in the current year. He receives $35,000 in dividends and interest during the year. In addition, he incurs a loss of $18,000 from an investment in a passive activity acquired three years ago. After considering the passive investment, Salvatore's net income for the current year is $ 2. LeAnne, a physician, earns $315,000 from her medical practice in the current year. She receives $40,000 in dividends and interest during the year. In addition, she incurs a loss of $42,000 from an investment in a passive activity acquired three years ago and has income of $9,000 from an investment in a passive activity acquired one year ago. After considering the passive investments, LeAnne's net income for the current year is $ 3. Gabriel, an accountant, earns $360,000 from his practice. He also receives $9,100 in dividends and interest from various portfolio investments. During the year, he pays $85,000 to acquire a 15% interest…
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For the current year, Sarah has salary of 50,000. In addition, she has the following capital transactions: Long-term capital gain (15%) 12,000 Short-term capital gain 8,000 Long-term capital loss (28%) (4,000) Short-term capital loss (10,000) What is her taxable income for the year? She has a short-term capital loss carry-over of 5,000 from the previous year. The standard deduction amount for her is 12,000
Kim's net worth at the beginning of the year is $250,000. Across the year she earns $60,000 before tax and pays tax of $15,000, spends $30,000, and makes a capital loss on her assets of $10,000. By the end of the year, her net worth is
George, an attorney, earns $200,000 from his law practice in the current year. He receives $25,000 in dividends and interest during the year as well as $5,000 of income from a passive activity. In addition, he incurs a loss of $20,000 from an investment in a passive activity. What is Carl’s AGI for the current year after considering the passive investments? $225,000 $200,000 $240,000 $245,000 $210,000
Judy has established a successful soup and bagel fast food restaurant, Soup for the Soul. At the beginning of the year, she had a balance of $13,000 in her cumulative eligible capital account. Over the years, she has deducted total EC amounts of $4,600 from her business income. Judy then sold an unlimited franchise of Soup for the Soul for $60,000 and incurred expenses of $3,000 in completing the sale. What will be the increase in Judy's taxable income as a result of the sale? Oa) $4,600 Ob) $16,767 Oc) $19,833 Od) $21,367

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