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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6 The City of Wade has a fiscal year ending June 30. Examine the following transactions for Wade: (A.) On 6/5/21, Wade opens a new landfill. The engineers estimate that at the end of 12 years the landfill will be full. Estimated costs to close the landfill are currently $4,800,000. (B.) On 6/18/21, Wade receives a donation of a vintage railroad steam engine. The engine will be put on display at the local town park. A fee will be charged to actually climb up into the engine. The engine has been valued at $650,000. (C.) On 6/30/21, Wade estimates that the landfill is 2% filled. Determine and prepare the general fund journal entries for the City of Wade for each lettered item for the purposes of preparing the fund financial statements.
At the beginning of the fall semester beauty state university a public university, billed tuition and fees at a gross amount of $4,800,000. of this amount, the university awarded a scholarship of $250,000 and $50,000 was believed to be uncollectible. The University also offered a generous tuition discount for the dependents of its employees. An additional $300,000 of the gross amount was awarded as employer provided tuition discounts. 1. Record the journal entry for the billing described above. 2. Assume that the transactions described above were in the summer instead of the fall. The billing was on June 25, fiscal year end is June 30, and the semester does not begin until July 15. How would the journal entries differ? 3. How would the journal entries in #1 differ for a private, nonprofit university?
4 The City of Evansville operated a summer camp program for at-risk youth. Businesses and nonprofit organizations sponsor one or more youth by paying the registration fee for program participants. The following Schedule of Cash Receipts and Disbursements summarizes the activity in the program’s bank account for the year. At the beginning of 2024, the program had unrestricted cash of $7,000. Cash Basis 12 months Cash receipts: Registration fees $96,500 Borrowing from bank 75,000 Total deposits 171,500 Cash disbursements: Wages 44,000 Payroll taxes and employee benefits 9,575 Insurance (paid monthly) 8,000 Purchase of bus 80,000 Interest on bank note 2,250 Total checks 143,825 Excess of receipts over disbursements $27,675 The loan from the bank is dated April 1 and is for a five-year period. Interest (6 percent annual rate) is paid on October 1 and April 1 of each year, beginning October 1, 2024. The bus was purchased on April 1 with the…
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