A farmer in Guiguinto, Bulacan planted 50 mango trees on his property whichare now fruit bearing. For the mangoes produced for the next 5 years, the farmer wasoffered the following by two wholesale buyers:Buyer A offered a down payment of P50,000 and P1,000 for the produce fromeach tree each year to be paid at the end of each of the 5 years.Buyer B will not pay any downpayment, but will pay P1,200 for the producefrom each tree each year to be paid at the beginning of each year for 5 years.If money is worth 12% effective, which of the offers should the farmer accept?

Given information : Buyer A proposal : Down payment 50000 Produce from each tree 1000…

Answered: A farmer in Guiguinto, Bulacan planted…

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter12: Corporations: Organization, Capital Structure, And Operating Rules

Section: Chapter Questions

Problem 27P

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During the last five months of the year, Dwana opens a new Internet telecommunications business called Dwan-Com. Dwan-Com bills 50,000 of revenues, but receives only 40,000 cash. Dwan-Com incurs 3,000 of supply expenses, and 41,000 of labor costs. Dwan-Com pays for 2,200 of the supplies and 38,000 of the labor costs in the current year. a. What is Dwan-Coms taxable income if it elects the cash method of accounting? b. What is Dwan-Coms taxable income if it elects the accrual method of accounting? c. What method of accounting do you recommend that Dwan-Com elect?
During the past year, Stacy McGill planted a new vineyard on 150 acres of land that she leases for $30,000 a year. She has asked you, as her accountant, to assist her in determining the value of her vineyard operation. The vineyard will bear no grapes for the first 5 years (1–5). In the next 5 years (6–10), Stacy estimates that the vines will bear grapes that can be sold for $60,000 each year. For the next 20 years (11–30), she expects the harvest will provide annual revenues of $110,000. But during the last 10 years (31–40) of the vineyard’s life, she estimates that revenues will decline to $80,000 per year. During the first 5 years, the annual cost of pruning, fertilizing, and caring for the vineyard is estimated at $9,000; during the years of production, 6–40, these costs will rise to $12,000 per year. The relevant market rate of interest for the entire period is 6%. Assume that all receipts and payments are made at the end of each year. Instructions Dick Button has offered to buy…
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M purchased a small lot in a subdivision, paying ₱200,000 down and promising to pay₱15,000 every 3 months for the next 10 years. The seller figured interest at 12%compounded quarterly.(a) After making 8 payments, M wished to discharge his remaining indebtedness by asingle payment at the time when the 9th regular payment was due, what must he payin addition to the regular payment then due?(b) If M missed the first 10 payments, what must he pay when the 11th payment is dueto discharge his entire indebtedness? (c) Cashflow Diagram
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M purchased a small lot in a subdivision. paying P200 000 down and promising to pay P15 000 every 3 months for the next 10 years. The seller figured interest at 12% compounded quarterly. (a) What was the cash price of the lot? (b) If M missed the first 12 payments what must he pay at the time the 13th is due to bring himself up to date? (c) After making 8 payments. M wished to discharge his remaining indebtedness by a single payment at the time when the 9th regular payment was due what must he pay in addition to the regular payment then due? Include the Cash Flow Diagram.
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