Gross Income: Joey incurred $100 in expenses from selling sports memorabilia. He received $800 in cash sales from this activity. Suzy owns 10 shares of Apple stock, which she purchased 6 years ago for $81 per share. It was worth $190 per share on December 31, 2023. Other income received by the couple:Interest income from their TD Bank savings account - $50Joey’s share of income from a real estate partnership (per Schedule K-1) - $1,000. The name of the partnership is Annapurna LLC, FEIN 24-1306521. Joey, a limited partner, owns a 10% interest in the partnership. Note: This should be reported on Schedule E, Part IIOrdinary dividend income from various stocks - $350Suzy received a $1,200 reimbursement of medical expenses from her employer-purchased health and accident insurance policy. She did not deduct these expenses in a prior year. Earned income Suzy received the following compensation from her employer during 2023: PayorGross IncomeFederal Income Tax WithholdingState Income Tax WithholdingAA Architects (W-2)70,00010,4002,149 Business income and expenses Information for “Sports r Us, LLC” (FEIN 23-1519268) applicable to 2023 calendar year:The business address is 3875 Chestnut Street, Philadelphia, PA Joey leases the property.Joey materially participates in the operation of the business. Sports r Us uses the cash method of accounting.Joey employs 4 full-time employees and will hire part-time employees, as needed, during the holiday season.Total gross income from sales of sports apparel and equipment - $590,000Business expenses recorded for accounting purposes: ExpenseAmountDepreciationSEE BELOWAdvertising40,000Insurance80,000Wages280,000Political contributions200Supplies8,000Taxes30,000Utilities10,000Rent expense40,000Take-out dinners for Joey & Suzy300 Business property eligible for depreciation:Assume that half-year convention applies to all property (built into the depreciation tables). If any information is missing, use reasonable assumptions to fill in the gaps.There are a total of 4 laptop computers in the store:2 were acquired in 2022 (i.e., this is year 2 of the computer’s life) - $5,000 cost2 were acquired in 2021 - $4,000 costThere are several desks, chairs, and other office furniture in the store:Most of the office furniture was acquired in 2020 (i.e., this is year 4 of the furniture’s life) - $12,000 costA new desk was acquired in 2023 - $6,000Joey also purchased a used printer in 2023 for $800 (computer equipment). The previous owner used the asset for the past 8 years.Joey’s business was quite profitable in 2023, so he purchased a new Honda CRV for $28,000. He uses the Honda 60% of the time for business, visiting vendors and potential customers. Itemized deductions:During the year, they incurred the following unreimbursed medical and dental expenses:Prescription medication - $800Payments to medical and dental providers - $1,100Expenses for cosmetic surgery - $2,500Costs of Joey’s stay at hospital for two weeks - $4,500State and local income taxes withheld during 2023 – $2,149Local real estate taxes on their personal residence - $10,000Interest paid on their home mortgage - $3,500Interest paid on their personal auto loan - $1,000Contributions of money to their local church - $200Contribution of money to Drexel University - $500. Tickets to Drexel basketball game received in exchange for this contribution: Fair Market Value of tickets = $20.They paid Jones, Jones, and Smith CPA firm $300 to prepare their 2022 tax returns.Joey incurred gambling losses of $2,000. He had no winning. TAX 341 Assignment: Tax Return ProblemTo be completed after Chapter 10Required:Use the following information to complete a 2023 federal income tax return for Joey andSuzy Apples. If any information is missing, use reasonable assumptions to fill in thegaps.⚫ Form 1040, Schedule 1, other schedules, and the Tax Tables are provided.General Information, Filing Status, and Dependents:Joey and Suzy Apples were married during the entire year. They have They have 2 childrenunder the age of 5 at the end of the year, Jimmy and Amy. The couple's filing status is marriedfiling jointly.Joey's Social Security number is 546-87-9876. Suzy's SS number is 342-25-2821. The coupleresides in Elkins Park, PA. Their mailing address is 456 High School Road, Elkins Park, PA19038.Joey (34) owns and operates as sports apparel and equipment business, "Sports r Us, LLC" forthe past 10 years * The business has one store location in Glenside, PA. His business isorganized as a Single Member LLC (SMLLC). Joey also receives cash from occasionally sellingsports memorabilia on eBay. Suzy (33) is a Drexel alum who works for a local architecture firm.Joey and Suzy did not buy, sell, exchange, or otherwise acquire any financial interest in a virtualcurrency. They would both like to contribute to the Presidential Election Campaign Fund.Joey and Suzy would like to receive a refund (if any) of tax they may have overpaid for the year.They prefer to receive the refund by check, not direct deposit.*Note: Joey is subject to Self-Employment Tax (Schedule SE)

Gross Income:1. Suzy's W-2 Income: $70,0002. Interest Income: $503. Ordinary Dividends: $3504.…

TAX 341 Assignment: Tax Return Problem To be completed after Chapter 10 Required: Use the following information to complete a 2023 federal income tax return for Joey and Suzy Apples. If any information is missing, use reasonable assumptions to fill in the gaps. ⚫ Form 1040, Schedule 1, other schedules, and the Tax Tables are provided. General Information, Filing Status, and Dependents: Joey and Suzy Apples were married during the entire year. They have They have 2 children under the age of 5 at the end of the year, Jimmy and Amy. The couple's filing status is married filing jointly. Joey's Social Security number is 546-87-9876. Suzy's SS number is 342-25-2821. The couple resides in Elkins Park, PA. Their mailing address is 456 High School Road, Elkins Park, PA 19038. Joey (34) owns and operates as sports apparel and equipment business, "Sports r Us, LLC" for the past 10 years * The business has one store location in Glenside, PA. His business is organized as a Single Member LLC (SMLLC). Joey also receives cash from occasionally selling sports memorabilia on eBay. Suzy (33) is a Drexel alum who works for a local architecture firm. Joey and Suzy did not buy, sell, exchange, or otherwise acquire any financial interest in a virtual currency. They would both like to contribute to the Presidential Election Campaign Fund. Joey and Suzy would like to receive a refund (if any) of tax they may have overpaid for the year. They prefer to receive the refund by check, not direct deposit. *Note: Joey is subject to Self-Employment Tax (Schedule SE)

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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Question

Gross Income:

Joey incurred $100 in expenses from selling sports memorabilia. He received $800 in cash sales from this activity.
Suzy owns 10 shares of Apple stock, which she purchased 6 years ago for $81 per share. It was worth $190 per share on December 31, 2023.
Other income received by the couple:
Interest income from their TD Bank savings account - $50
Joey’s share of income from a real estate partnership (per Schedule K-1) - $1,000. The name of the partnership is Annapurna LLC, FEIN 24-1306521. Joey, a limited partner, owns a 10% interest in the partnership. Note: This should be reported on Schedule E, Part II
Ordinary dividend income from various stocks - $350
Suzy received a $1,200 reimbursement of medical expenses from her employer-purchased health and accident insurance policy. She did not deduct these expenses in a prior year.

Earned income

Suzy received the following compensation from her employer during 2023:

Payor	Gross Income	Federal Income Tax Withholding	State Income Tax Withholding
AA Architects (W-2)	70,000	10,400	2,149

Business income and expenses

Information for “Sports r Us, LLC” (FEIN 23-1519268) applicable to 2023 calendar year:
The business address is 3875 Chestnut Street, Philadelphia, PA Joey leases the property.
Joey materially participates in the operation of the business. Sports r Us uses the cash method of accounting.
Joey employs 4 full-time employees and will hire part-time employees, as needed, during the holiday season.
Total gross income from sales of sports apparel and equipment - $590,000
Business expenses recorded for accounting purposes:

Expense	Amount
Depreciation	SEE BELOW
Advertising	40,000
Insurance	80,000
Wages	280,000
Political contributions	200
Supplies	8,000
Taxes	30,000
Utilities	10,000
Rent expense	40,000
Take-out dinners for Joey & Suzy	300

Business property eligible for depreciation:

Assume that half-year convention applies to all property (built into the depreciation tables). If any information is missing, use reasonable assumptions to fill in the gaps.

There are a total of 4 laptop computers in the store:
2 were acquired in 2022 (i.e., this is year 2 of the computer’s life) - $5,000 cost
2 were acquired in 2021 - $4,000 cost
There are several desks, chairs, and other office furniture in the store:
Most of the office furniture was acquired in 2020 (i.e., this is year 4 of the furniture’s life) - $12,000 cost
A new desk was acquired in 2023 - $6,000
Joey also purchased a used printer in 2023 for $800 (computer equipment). The previous owner used the asset for the past 8 years.
Joey’s business was quite profitable in 2023, so he purchased a new Honda CRV for $28,000. He uses the Honda 60% of the time for business, visiting vendors and potential customers.

Itemized deductions:

During the year, they incurred the following unreimbursed medical and dental expenses:
Prescription medication - $800
Payments to medical and dental providers - $1,100
Expenses for cosmetic surgery - $2,500
Costs of Joey’s stay at hospital for two weeks - $4,500
State and local income taxes withheld during 2023 – $2,149
Local real estate taxes on their personal residence - $10,000
Interest paid on their home mortgage - $3,500
Interest paid on their personal auto loan - $1,000
Contributions of money to their local church - $200
Contribution of money to Drexel University - $500. Tickets to Drexel basketball game received in exchange for this contribution: Fair Market Value of tickets = $20.
They paid Jones, Jones, and Smith CPA firm $300 to prepare their 2022 tax returns.
Joey incurred gambling losses of $2,000. He had no winning.

TAX 341 Assignment: Tax Return Problem
To be completed after Chapter 10
Required:
Use the following information to complete a 2023 federal income tax return for Joey and
Suzy Apples. If any information is missing, use reasonable assumptions to fill in the
gaps.
⚫ Form 1040, Schedule 1, other schedules, and the Tax Tables are provided.
General Information, Filing Status, and Dependents:
Joey and Suzy Apples were married during the entire year. They have They have 2 children
under the age of 5 at the end of the year, Jimmy and Amy. The couple's filing status is married
filing jointly.
Joey's Social Security number is 546-87-9876. Suzy's SS number is 342-25-2821. The couple
resides in Elkins Park, PA. Their mailing address is 456 High School Road, Elkins Park, PA
19038.
Joey (34) owns and operates as sports apparel and equipment business, "Sports r Us, LLC" for
the past 10 years * The business has one store location in Glenside, PA. His business is
organized as a Single Member LLC (SMLLC). Joey also receives cash from occasionally selling
sports memorabilia on eBay. Suzy (33) is a Drexel alum who works for a local architecture firm.
Joey and Suzy did not buy, sell, exchange, or otherwise acquire any financial interest in a virtual
currency. They would both like to contribute to the Presidential Election Campaign Fund.
Joey and Suzy would like to receive a refund (if any) of tax they may have overpaid for the year.
They prefer to receive the refund by check, not direct deposit.
*Note: Joey is subject to Self-Employment Tax (Schedule SE)

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