On January 1, 2019, Charles Jamison borrows $40,000 from his father to open a business.Charles is the beneficiary of a trust created by his aunt from which he will receive $25,000on January 1, 2029. He signs an agreement to make this amount payable to his father and,further, to pay his father equal annual amounts from January 1, 2020, to January 1, 2028,inclusive, in retirement of the debt. Interest is 12% per year. What are the annualpayments?

The objective of the question is to calculate the annual payments Charles needs to make to his…

Answered: On January 1, 2019, Charles Jamison…

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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An individual died on June 30, 2020. On that date, they owned marketable securities worth $100,000 and an adjusted cost base (ACB) of $40,000; and an unmatured registered retirement savings plan (RRSP) of $250,000. Up to the date of death, they received interest income of $8,000 and salary income of $35,000. By the terms of the will the securities were given to the son and the RRSP to the spouse. How much would be reported in the deceased’s income for 2020?
Liz had AGI of $130,000 in 2020. She donated Bluebird Corporation stock with a basis of $10,000 to a qualified charitable organization on July 5, 2020. What is the amount of Liz’s deduction assuming that she purchased the stock on December 3, 2019, and the stock had a fair market value of $17,000 when she made the donation? Assume the same facts as in part (a), except that Liz purchased the stock on July 1, 2017. Assume the same facts as in part (a), except that the stock had a fair market value of $7,500 (rather than $17,000) when Liz donated it to the charity.
In December 2020, Ryan paid $31,230 for an insurance policy that covers his business property for accidents and casualties. Ryan is a calendar-year taxpayer who uses the cash method of accounting. What amount of the insurance premium may Ryan deduct in 2020 in each of the following alternative scenarios?a. The policy covers the business property from March 1, 2021 – February 28, 2022.b. The policy covers the business property from November 1, 2020 – October 31, 2022.c. The policy covers the business property from December 1, 2020 – November 30, 2021.d. Assume that instead of paying an insurance premium, Ryan paid $31,230 in rent for Dec 1, 2020 – May 31, 2021. Please show excel work
Jim has elected to treat transfers (on behalf of his son) made by him during tax year 2022 to a qualified state tuition program as made ratably over 5 years. His total contribution to this plan during 2022 is $80,000. He makes no other transfers during tax year 2022. What amount will be treated as a taxable gift in tax year 2022?
In 2022, K, age 12, received a gift of stocks and bonds from K's uncle Hal. K had interest income of $900, dividend income of $4,000, from the stocks and bonds during 2022 and also earned $1,000 from walking dogs in the neighborhood. K's parents have taxable income of $80,000 and file a joint return. K had no expenses and files K's own return. What is K's a. Gross Income b. Net Unearned Income c. Tax Due
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In September 2018, Bill and Linda, a married couple with $50,000 gross income, cashed qualified Series EE U.S. Savings Bonds which they had purchased in 2011. The proceeds were used to help pay for their son's 2018 college tuition. They received gross proceeds of $3,500, representing principal of $3,000 and interest of $500. The qualified higher education expenses they paid in 2018 totaled $2,100. Their modified adjusted gross income for the year was $20,000. How much of the $500 interest can Bill and Linda exclude from gross income in 2018?
Kiki purchases a $16,000 bond from Green Corp. on January 1, 2021. The bond has a 10% annual interest rate. On December 1, 2021, Kiki gifts the bond to her son, Branson. How much income is reported by Kiki? Branson?
15) On September 1, 2019, Samuel sold his home to Edward, for $100,000. Real estate taxes on the property for the year are $3,650 and were paid my Samuel on January 9, 2019. The effects of this transaction are: O A) Taxes allocated to Samuel $1,220 O B) Taxes allocated to Samuel $0 C) Taxes allocated to Samuel $2,430 O D) Taxes allocated to Edward $2,430 Taxes allocated to Edward $3,650 Taxes allocated to Edward $1,220 Taxes allocated to Samuel $3,650 Taxes allocated to Edward $0
In June of 2019, Kevin inherits stock worth $125,000. During the year, he collects $5,600 in dividends from the stock. How much of these amounts, if any, should Kevin include in his gross income for 2019?
Patrick King dies on January 15, 2021. On the date of his death, Patrick had a bank account which pays interest on a quarterly basis. On March 31, 2021, $12,000 of interest income is credited to Patrick's bank account. (a.) If Patrick was on the cash basis of accounting at the date of his death, how much income would be included on his final income tax return? (b.) Would your answer to (a) change if Patrick was on the accrual basis of accounting at the date of his death? (c.) If Patrick does not recognize all of the interest income on his final income tax retun in part (a) or (b), who would recognize the income?

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