Mr. Jones, the owner of a small service business, decided to give his personal truck to the business permanently. He believes the truck is worth $40,000, although Kelly Blue Book has a fair market value of $25,000. You're the accountant and, Mr. Jones tells you to record the truck on the books for $40,000. Question: Which value will you use and why?
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Mr. Jones, the owner of a small service business, decided to give his personal truck to the business permanently. He believes the truck is worth $40,000, although Kelly Blue Book has a fair market value of $25,000. You're the accountant and, Mr. Jones tells you to record the truck on the books for $40,000.
Question: Which value will you use and why?
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- When Craig began his business, he invested his own 2020 Ford pick-up truck into the business. He originally paid $25,000 for the truck and the current estimated fair market value is $14,000. The truck will exclusively be used for the business. Craig would like to know how much to record the truck for in the accounting software. Research this and support your answer with an excerpt from the IRS publication citing this reasoning. (Hint: Search Publication 551)Answer the question based on what you have learned on a legal basis. Facts: You offered to sell your automobile to Wil for P100,000.00. After inspecting the automobile, Wil offered to buy it for P80,000.00. This offer was accepted by you. The next day, you offered to deliver the automobile, but Wil being short of funds, secured postponement of the delivery, promising to pay the price “upon arrival of the steamer". The steamer however never arrived because it was wrecked by a typhoon and sank somewhere off the Coast of Samar. Question: Is there a perfected contract in this case? Why or why not? Answer:Mysty offered to sell her car to Tim for $15 000. Tim faxed a letter to her that said, "Consider it sold. I'll bring the money to you next Monday when I pick up the vehicle. Of course, for that price, I'll want you to install a new stereo in it." Tim did not hear anything more from Mysty, but he arrived at her door the following Monday with $15 000 in cash. He was delighted to find that a new stereo had been installed in the car, but disappointed when Mysty refused to accept his money or hand over the vehicle.Mysty is required to do so because there was a valid offer and acceptance. – Is this true or false?Very briefly, explain why this is true/false
- Lileth Adriano, who plans to go abroad, is selling her mini-donut business. Her friend, Benita Solido is interested to buy it but can only afford to pay P350,000. The following are the assets of Adriano’s business: a. How much is the net worth assuming there is a mortgage note of P150,000 attached to the equipment? b. Will Benita Solido be able to afford to buy the business? c. Make the entry in the books of Benita. Book Value Market Value Equipment (net of accumulated depreciation of P25,000) P350,000 P300,000 Furniture and Fixtures (net of accumulated depreciation of P5,000) 75,000 50,000 Raw Materials 35,000 25,000 Franchise Right 150,000 100,000 Total P610,000 P475,Scrooge is thinking of selling his money lending business. He has been the sole owner for 6 years since his partner died. He has three employees – Bob, Cindy, and Dale. He decides to sell the company to the three of them. The business is worth $120,000. Each employee puts in $40,000 to buy the company. According to the Howey Test, was a security issued? A. Yes, because there was an equal investment of money B. No, because he did not register with the SEC C. Yes, because there was a common enterprise D. No, because there was a complete sale of the businessTalbot purchases business machinery for a price of $100,000. Talbot pays the seller $20,000 in cash and finances the rest by giving the seller a note for $80,000. What is Talbot’s initial basis in this machinery?
- I hire Susan to sell my house. I tell her that I'm hoping to get $200,000 for the house. She tells me she needs $2,000 to make repairs on the house before it is listed for sale. I give her the $2,000. She takes my money but never makes the repairs. The house sells for $220,000. If Susan is ordered to pay restitution, she will have to pay $ 2000T Chin starts a business. Before he actually starts to sell anything he buys fixtures at $2000, a motor vehicle for $5000 and stock of goods for $3500. Although he paid in full for the fixtures and the motor vehicle , he still owes $1400 for some of the goods . J. Preston had lent chin $3000. Chin , after the above, has $2800 in the business bank sand 1000 cash in hand.. You are required to calculate his capital and prepare a balance sheet for Chin as at June 30 2008.Ken Lewin, a factory worker in Toronto, Ontario asks you to help him find out how much he is worth From a discussion with him you found out the following facts:. • His bank balance is $3 650. • He owns a home valued at $492 000, which has a mortgage on it of $ 162 360. • He owns furniture and household equipment valued at $ 55 000. • He owns a summer property valued at $ 225 000, which he bought entirely with money borrowed from the bank. Since the time of purchase he has repaid $ 80 000 of the loan. . He has unpaid bills amounting up to $4 200 • He owes his mother-in-law Jane Duncan, the sum of $ 50 000, which he borrowed interest free several years ago at the time he bought his house. List Ken Lewin's assets in one column. His liabilities in another, and calculate his equity. Mira Gordon assets and liabilities are listed below in random order: Bank balance $856.25; Bank Loan $5 000; House and lot; $185 000.00; Cash on hand $ 85.35, Amount owed to Esso oil $ 135.60, Amount owed to…
- Sarah and Gabe are considering the following transactions and have asked you to explain the impact of the transactions on their Statement of Financial Position: Purchase a baseball card collection from Gabe’s uncle for $5,000 cash. Gabe feels the cards are worth more than $5,000. There has never been an official appraisal of the collection. Secure a home-equity loan of $25,000 to have on hand for various projects and possibly to take a family vacation abroad. Trade the pick-up for an SUV at a cost of $40,000. They will use their pick-up truck as a trade-in as a down payment, the current value is estimated at $7,000, and borrow the balance at a projected rate of 5%. Also, they anticipate their respective 401(k) accounts increasing in value by 15% this year and have asked if this will have any impact on their financial statements. please explain properly thnku2. Warren owns a marketing business. He travels to Maryland in May 2020 to discuss acquiring an accounting business. In June Warren travels to Georgia to discuss acquiring a pizza shop. Warren does not acquire the accounting business but does purchase the pizza shop on December 2, 2020. Total costs to investigate acquiring the accounting business $25,000. Total costs to investigate acquiring the pizza shop $52,000. What is the maximum amount Warren can deduct in 2020 for investigating these businesses? How will he show this on his tax return? Calculate the deduction that Warren can take on his tax return for 202o.Jessica is a professional consultant. She agrees to consulting services for Joe for $2,000. After she finishes, Joe does not have cash to pay Jessica, but he has an antique, collectible baseball card with a fair market value of $2,000 that he gives her to satisfy the payment. The baseball card cost Joe $500. How much should Jessica include in her gross income?