I need help solving this General accounting question with the proper methodology. Pear Tree Enterprises has accumulated earnings and profits of$310,000 at year-end. The company pays its president, Alice, asalary and bonus totaling $250,000. Before deducting the salaryand bonus, Pear Tree's taxable income was $270,000. The IRSdetermines that $90,000 of Alice's compensation isunreasonable.What is Pear Tree's taxable income after the IRSreclassification?

Step 1: Understand the IRS ReclassificationThe IRS has determined that $90,000 of Alice's $250,000…

Answered: Pear Tree Enterprises has accumulated…

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter6: Deductions And Losses: In General

Section: Chapter Questions

Problem 27CE

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Troy, a cash basis taxpayer, is employed by Eagle Corporation, also a cash basis taxpayer. Tray is a full-time employee of the corporation and receives a salary of 60,000 per year. He also receives a bonus equal to 10% of all collections from diems he serviced during the year. Determine the tax consequences of the following events to the corporation and to Troy: a. On December 31, 2019, Troy was visiting a customer. The customer gave Troy a 10,000 check payable to the corporation for appraisal services Troy performed during 2019. Troy did not deliver the check to the corporation until January 2020. b. The facts are the same as in part (a), except that the corporation is an accrual basis taxpayer and Troy deposited the check on December 31, but the bank did not add the deposit to the corporations account until January 2020. c. The facts are the same as in part (a), except that the customer told Troy to hold the check until January 2020 when the customer could make a bank deposit that would cover the check.
How do the all events and economic performance requirements apply to the following transactions by an accrual basis taxpayer? a. The company guarantees its products for six months. At the end of 2019, customers had made valid claims for 600,000 that were not paid until 2020. Also, the company estimates that another 400,000 in claims from 2019 sales will be filed and paid in 2020. b. The accrual basis taxpayer reported 200,000 in corporate taxable income for 2019. The state income tax rate was 6%. The corporation paid 7,000 in estimated state income taxes in 2019 and paid 2,000 on 2018 state income taxes when it filed its 2018 state income tax return in March 2019. The company filed its 2019 state income tax return in March 2020 and paid the remaining 5,000 of its 2019 state income tax liability. c. An employee was involved in an accident while making a sales call. The company paid the injured victim 15,000 in 2019 and agreed to pay the victim 15,000 a year for the next nine years.
Alec Baldwin, Inc., has accumulated earnings and profits at the end of the year of $350,000. Alec Baldwin pays a salary and bonus of $180,000 to Michael, its CEO. Alec Baldwin's taxable income before the salary and bonus is $260,000. The IRS classifies $60,000 of the salary and bonus as unreasonable. Calculate Alec Baldwin's taxable income after the reclassification. a. $20,000 b. $80,000 c. $140,000 d. $260,000 e. None of the above
year Apricot, Inc., has accumulated earnings and profits at the end of the of $275,000. Apricot pays a salary and bonus of $200,000 to Donald, its CEO. Apricot's taxable income before the salary and bonus is $225,000. The IRS classifies $75,000 of the salary and bonus as unreasonable. Calculate Apricot's taxable income after the reclassification. a. $25,000 b. $100,000 c. $125,000 d. $225,000 e. None of the above
Calculate alec Baldwin's taxable income
General accounting
Please show the solution.
Mr Jacob Johnson has net employment income of $41300 (after the deduction of $8600 in RPP contributions), interest income of $14600, taxable dividends of $5,000, and receives taxable support payments from his former spouse of $15700 during the year. What is Mr. Johnson's Earned Income for RRSP purposes for the current year?
Compute for the tax due of the following individuals using the RA 10963 tax table. Show computations. 1. An employee with annual salary of P500,000, annual allowable deductions of P28,000 and bonus of P100,000 for the year.
Calculate apricots taxable income after the reclassification
The accountant of ABC Corporation has been regularly filing the entity's quarterly income tax return. However differences between taxable income and financial income are accounted for at year end. for the year ended December 31,2019, ABC Corporation reported pretax financial income of P 5,000,000 . Included in the pretax financial income was P 9000,000 of non taxable life insurance received as a result of death of an officer; P 1,200,000 of warranty expenses accrued but unpaid as of December 31,2019 and P 200,000 of impairment loss in goodwill. Income tax rate is 30% for all years. Income taxes paid up to the 3rd quarter of 2019 amounted to P 928,000, What is the amount of income taxes payable at December 31,2019?
A single person has taxable income of $85,000 per year. She earns $1,800 in interest from a certificate of deposit. How much federal income tax expense will be calculated on these earnings? Tax year 2019. Deduction amount 12,200. Tax rate 24%

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