Malcolm Woodchip, a furniture salesman, commences business on his own on 1 April of the current income year. He purchases an existing business and is granted a lease of showrooms. Malcolm paid $600 to a mortgage broker to obtain a loan of $15,000 to pay the premium for the lease at 18% for the 6-year period. How much of the broker fee would Malcolm be able to claim as a deduction? O $0 O 600/2190 = 0.27 x 91 = $25 600/1825 0.33 x 91 = $30 O $600 =

Malcolm Woodchip, a furniture salesman, commences business on his own on 1 April of the current income year. He purchases an existing business and is granted a lease of showrooms. Malcolm paid $600 to a mortgage broker to obtain a loan of $15,000 to pay the premium for the lease at 18% for the 6-year period. How much of the broker fee would Malcolm be able to claim as a deduction? O $0 O 600/2190 = 0.27 x 91 = $25 600/1825 0.33 x 91 = $30 O $600 =

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Selly sold his car to Buyie for 120,000 payable in 12 equal installments of 10,000 each month. As a security Buyie executed a chattel mortgage on the car. What is the remedy if he defaulted to pay one installment?a. Exact fulfillmentb. Cancel the salec. Foreclose the chatteld. All of the abovee. None of the Above
Assume that the prescribed rate for each quarter last year was 4%. Gerry received a loan from his employer of $60,000 at 2%, which he put towards a rental property he purchased for $120,000. He paid the balance in cash. What was his taxable benefit last year as a result of the loan that he obtained from his employer? a) $0 b) $600 c) $1,200 d) $2,400 Alan Peterson made a $2,000 RRSP contribution this year, and his marginal tax rate is 29%. Next year, Alan expects to get a significant raise, such that his marginal tax rate will increase to 43%. The Income Tax Act allows him to deduct his RRSP contribution this year, or to carry the deduction forward to future years. When should he claim the deduction to optimize the tax benefits? a) He should claim the deduction this year. b) He should claim the deduction next year. c) It does not matter when he claims the deduction because it will result in the same tax reduction in either year. d) He should split the deduction between his tax returns…
Mr. Zheng purchased a residential flat in Hong Kong with a mortgage loan obtained from a local bank. The property was let to TJ Ltd. under the following terms: (1) Period of lease: (2) Rent free period: (3) Monthly rent: (4) Premium: (5) Rates & government rent: 1 April 2020 to 31 March 2022 (24 months) 1 April 2020 to 30 April 2020 (1 month) $22,000 $100,000 payable on 1 April 2020 Payable by the landlord Despite taking legal actions against a former tenant, the former tenant did not settle the outstanding rent of $75,000, being rent owed for the period from 1 November 2019 to 31 January 2020. The tenant was declared bankrupt on 30 April 2020. The assessor accepted that the outstanding tax was irrecoverable when the tenant declared bankrupt. On 1 June 2020, Mr. Zheng received outstanding rent of $30,000 from another former tenant. The total amount owed by this tenant was $60,000 and this amount was allowed as irrecoverable rent in the year of assessment 2015/16. During the year ended…
Brad operates a storage business on the accrual method. On July 1, Brad paid $48,000 for rent on his storage warehouse and $18,000 for Insurance on the contents of the warehouse. The rent and Insurance cover the next 12 months. What Is Brad's deduction for the rent and Insurance? Multiple Choice O O O O O $48,000 for the rent and $18,000 for the Insurance $24,000 for the rent and $18,000 for the Insurance $24,000 for the rent and $9,000 for the insurance $48,000 for the rent and $9,000 for the insurance None of the choices are correct.
Rex rents out his vacation home for 10 months and lives in his vacation home for the remainder of the year. His gross rental income for 2020 is $8,600. The expenses attributable to the vacation home for the entire year are as follows: Real estate taxes $2,500 Interest on mortgage loan 3,800 Utilities 1,000 Repairs/maintenance 800 Depreciation 3,500 What amount would Rex report as net income or loss from the rental of the vacation home?
Compute Sandee’s 2021 net rental income
Stephen purchased a rental property on 03 August 2020 and has rented the property from this date.He incurred the following expenses when purchasing the property –> $6,320 Lender’s Mortgage Insurance> $15,987 Stamp duty on transfer of the property> $1,500 Mortgage broker’s fee> $750 Conveyancing fees> $600 Bank loan establishment fee> $700 Stamp duty on the mortgageCalculate how much Stephen can claim in borrowing costs for the 2021 year and select the correct answer below. $1,766 $1,658 $1,311 $1,442 $1,879
Elizabeth makes the following interest-free loans during the year. Assume that tax avoidance is not a principal purpose of any of the loans. The relevant Federal rate is 5% and that the loans were outstanding for the last six months of the year. Borrower's Net Borrower Amount Investment Income Purpose of Loan Richard $5,000 $800 Gift Woody $8,000 $600 Stock purchase Irene $105,000 $0 Purchase principal residence By how much do each of these loans increase Elizabeth's gross income? If an amount is zero, enter "0". a. Richard is not subject to the imputed interest rules because the $10,000 gift loan exception does apply. Elizabeth's gross income from the loan is $ 0 b. The $10,000 exception does not income producing apply to the loan to Woody because the proceeds were used to purchase assets. Although the $100,000 exception applies to this loan, the amount of imputed interest is 1,000 X.Incorrect is $ 0 ✓. c. None of the exceptions apply gross income from the loan is $ to the loan to…
Higuel owes $650 in 3 years and $1500 in 8 years. However, Miguel is unable to meet his $650 obligation at the end of 3 years. By mutual agreement with the lender Miguel is allowed to pay off both obligations at the end of 6 years based on a simple interest rate of 17.25%. Determine the amount required to settle the dette at the end of 6 years. In text only please
Eric borrowed $4,695 from Roger and signed a contract agreeing to pay it back 10 months later with 4.15% simple interest. After 3 months, Roger sold the contract to Chris at a price that would earn Chris 5.00% simple interest per annum. Calculate the price that Chris paid Roger. Your Answer: 4 Answer
Please do not answer this question in excel thank you in advance. Nell has a 30-year mortgage of $403,897. Nell qualifies for a 2.88% loan. Annual property taxes are $2,548 and annual insurance is $1,412. Calculate Nell's monthly PITI payment.
Ms. Carla Babo, a self-employed individual, rents out a five-room apartment. One of the rooms is rented to Mr. Maco Knot on March 1 of the current year, with the following terms and conditions. How much is the gross income of Ms. Babo at the end of the year? Monthly rental Security deposit for 3 months to be returned at the end of the lease contract Share on the real estate tax assumed by the lessee 15,000 45,000 2,500 152,500 182,500 197,500 227,500 None of the above