This year, Amber purchased a business that processes and packages landscape mulch. Approximately 20 percent of management time, space, and expenses are spent on this manufacturing process. At the end of the year, Amber's accountant indicated that the business had processed 10 million bags of mulch, but only 1 million bags remained in the ending inventory. a. What is Amber's tax basis in her ending inventory if the UNICAP rules are used to allocate indirect costs to inventory? (Assume direct costs are allocated to inventory according to the level of ending inventory. In contrast, indirect costs are first allocated by time spent and then according to level of ending inventory.) Note: Leave no answers blank. Enter zero if applicable. Material: Mulch and packaging Material: Administrative supplies Salaries: Factory labor Salaries: Sales and advertising Salaries: Administration Property taxes: Factory Property taxes: Offices Depreciation: Factory Depreciation: Offices Total Inventory Costs $ Costs 500,000 25,000 1,200,000 350,000 520,000 460,000 270,000 800,000 150,000 Tax Inventory $ 69 0

This year, Amber purchased a business that processes and packages landscape mulch. Approximately 20 percent of management time, space, and expenses are spent on this manufacturing process. At the end of the year, Amber's accountant indicated that the business had processed 10 million bags of mulch, but only 1 million bags remained in the ending inventory. a. What is Amber's tax basis in her ending inventory if the UNICAP rules are used to allocate indirect costs to inventory? (Assume direct costs are allocated to inventory according to the level of ending inventory. In contrast, indirect costs are first allocated by time spent and then according to level of ending inventory.) Note: Leave no answers blank. Enter zero if applicable. Material: Mulch and packaging Material: Administrative supplies Salaries: Factory labor Salaries: Sales and advertising Salaries: Administration Property taxes: Factory Property taxes: Offices Depreciation: Factory Depreciation: Offices Total Inventory Costs $ Costs 500,000 25,000 1,200,000 350,000 520,000 460,000 270,000 800,000 150,000 Tax Inventory $ 69 0

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Mr A is a florist. He owns a delivery van which is primarily used for collecting supplies and making deliveries to customers. However, outside of regular business hours, Mr A uses the van for personal errands, such as shopping and driving his children to school. Throughout the Tax Period, Mr A recorded the mileage of his business and personal journeys. The mileage records revealed that journeys made for a business purpose accounted for 60% of the use of the van, while the remaining 40% of use related to Mr A’s personal use of the van. Mr A’s accounting income for the tax period is AED 4,500,000. Vehicle expenses were calculated to be AED 120,000. What is Mr A's tax liability?
Please do not give solution in image format ?
Steven is an accountant and maintains an office in his home. Expenses of the business (other than home office expenses) are $15,000. Steven incurs the following home office expenses: Real property taxes on residence: $2,400 Interest expense on residence: $4,000 Operating expenses of residence: $3,200 Depreciation on residence (based on 8% business use): $450. His office occupies 10% of the total floor space of his residence. Gross income from his business is $34,000. Assuming that Steven uses the regular method, what is his allowable office in the home deduction?
In 2016 Gabby purchased and placed into service equipmentused in her business as a cost of $ 800,000. Because of newtechnology, this equipment was not useful after a few years, soGabby sold the equipment in 2020 for $ 5,000. At the time of thesale, Gabby had claimed accumulated tax depreciation of $340,000 on this equipment. Assume that Gabby has substantialincome and has a 2020 marginal ordinary income tax rate of37% and a marginal net capital gain rate of 20%, how much taxwill Gabby save due to the loss on the sale of this asset?
Through November, Cameron has received gross income of $130,500. For December, Cameron is considering whether to accept one more work engagement for the year. Engagement 1 will generate $9,730 of revenue at a cost to Cameron of $4,050, which is deductible for AGI. In contrast, engagement 2 will generate $7,100 of qualified business income (QBI), which is eligible for the 20 percent QBI deduction. Cameron files as a single taxpayer, and he did not contribute to charity during the year. Calculate Cameron's taxable income assuming he chooses engagement 1 and assuming he chooses engagement 2. Assume he has no itemized deductions. Description (1) Gross income before new work engagement (2) Income from engagement (3) Additional for AGI deduction (4) Adjusted gross income (6) Deduction for QBI Taxable income Engagement 1 Engagement 2
Mr. Aguak earned the following prizes from two different competitions: January 4, 2017, Singing competition P12,000, February 14, 2017 Painting competition P10,100. Compute the total final tax that should have been withheld from the above prizes.
Stanford owns and operates two dry cleaning businesses. He travels to Boston to discuss acquiring a restaurant. Later in the month, he travels to New York to discuss acquiring a bakery. Stanford does not acquire the restaurant but does purchase the bakery on November 1, 2022. Stanford incurred the following expenses: Total investigation costs related to the restaurant Total investigation costs related to the bakery $42,750 53,300 If required, round any division to two decimal places and use in subsequent computation. Round your final answer to the nearest dollar. What is the maximum amount Stanford can deduct in 2022 for investigation expenses?
Target Co is a large transport company. In the previous financial year, it billed one of its customers $ 1,500 for services that it had provided. Target Co has recently discovered that the client is experiencing financial distress and will not be able to pay its bill. What action should Target Co take from a tax perspective? (Maximum 250 words)
22. McLaughlin Corporation's statement of financial position showed the following amounts: current liabilities, $75,000; total liabilities, $100,000; total assets, $200,000. What is the total debt to total assets ratio? a.1 b.2 c.0.50 d.0.875
Last year, lana purchased a $100,000 account receivable for $90,000. During the current year, Lucy collected $97,000 on the account. What are the tax consequences to Lucy associated with the collection of the account receivable? No subsequent collections are expected. a.$7,000 gain b.$3,000 loss c.$13,000 loss d.$2,000 gain
Bob is a farmer and is required to use the accrual method. At the beginning of the year, Bob has inventory, including livestock held for resale, amounting to $10,000. During the year, Bob purchased livestock totaling $3,000. Bob’s ending inventory was $4,000. Bob’snet sales for the year totaled $17,000. What is Bob’s gross profit for the current year?a. $9,000b. $17,000c. $8,000d. $13,000
Through November, Cameron has received gross income of $131,000. For December, Cameron is considering whether to accept one more work engagement for the year. Engagement 1 will generate $9,860 of revenue at a cost to Cameron of $4,100, which is deductible for AGI. In contrast, engagement 2 will generate $7,200 of qualified business income (QBI), which is eligible for the 20 percent QBI deduction. Cameron files as a single taxpayer. Calculate Cameron's taxable income assuming he chooses engagement 1 and assuming he chooses engagement 2. Assume he has no itemized deductions. Description (1) Gross income before new work engagement (2) Income from engagement (3) Additional for AGI deduction (4) Adjusted gross income (6) Deduction for QBI Taxable income Engagement 1 Engagement 2