Problem 6-38 (LO. 2) Duck, an accrual basis corporation, sponsored a rock concert on December 29, 2020. Gross receipts were $300,000. The following expenses were incurred and paid as indicated: Expense Payment Date Rental of coliseum $25,000 December 21, 2020 Cost of goods sold: Food 30,000 December 30, 2020 Souvenirs 60,000 December 30, 2020 Performers 100,000 January 5, 2021 Cleaning the coliseum $10,000 February 1, 2021 Because the coliseum was not scheduled to be used again until January 15, the company with which Duck had contracted did not perform the cleanup until January 8-10, 2021. a. Calculate Duck's net income from the concert for tax purposes for 202o. If an amount is zero, enter "0". Gross receipts Less: Coliseum rental Food Souvenirs Performers Cleaning costs Total expenses Net income for 2020 b. What is the true cost to Duck if it had to defer the $100,000 deduction for the performers until 2021? Assume a 5% discount rate and a 21% marginal tax rate in 2020 and 2021. The present value factor for a single sum at 5% for one year is 0.9524. If required, round your answers to the nearest dollar. The present valu e of the 2021 ta Y savings is t and the cost of the deferral to Duck is t

Problem 6-38 (LO. 2) Duck, an accrual basis corporation, sponsored a rock concert on December 29, 2020. Gross receipts were $300,000. The following expenses were incurred and paid as indicated: Expense Payment Date Rental of coliseum $25,000 December 21, 2020 Cost of goods sold: Food 30,000 December 30, 2020 Souvenirs 60,000 December 30, 2020 Performers 100,000 January 5, 2021 Cleaning the coliseum $10,000 February 1, 2021 Because the coliseum was not scheduled to be used again until January 15, the company with which Duck had contracted did not perform the cleanup until January 8-10, 2021. a. Calculate Duck's net income from the concert for tax purposes for 202o. If an amount is zero, enter "0". Gross receipts Less: Coliseum rental Food Souvenirs Performers Cleaning costs Total expenses Net income for 2020 b. What is the true cost to Duck if it had to defer the $100,000 deduction for the performers until 2021? Assume a 5% discount rate and a 21% marginal tax rate in 2020 and 2021. The present value factor for a single sum at 5% for one year is 0.9524. If required, round your answers to the nearest dollar. The present valu e of the 2021 ta Y savings is t and the cost of the deferral to Duck is t

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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John Doe founded Premier Construction. Operations started on October 1, 2021. John's son, a teenager, kept the books for the first two months. John decides that it is time to hire a bookkeeper with formal training. He asks you to record the activity for December and to complete the accounting cycle for the quarter ended December 31, 2021. The trial balance as of 11/30/2021 and the detail for the Accounts Receivable account balance is on page 2. The December 2021 events are on page 3. Additional Information: Ellie Smith is the only employee. She is paid on the 1st of month for the pay period ending on the last day of the prior month and on the 16th of the month for the pay period covering the first fifteen days of the current month. Required 1. Enter the balances as of 11/30/2021 in the general ledger. 2. Prepare journal entries to record each of the December transactions for Premier Construction. If an event is not a transaction, write the date and "no entry needed" on the journal…