Lancelot is a dealer of household appliances. He reported the following in 2019 and 2020:20192020Installment salesP500,000 P800,000Cost of installment sales 250,000 440,000Collections300,000 600,000Lance's 2020 collection is inclusive of P100,000 accounts from 2019.Using the accrual basis of accounting compute Lancelot's gross income subject to income tax in 2020.P360,000P275,000P320,000P250,000

Accrual Basis of accounting means recording transaction on Accrual basis i.e. as and when they…

ancelot is a dealer of household appliances. He reported the following in 201 | 2019 P500,000 P800,000 2020 Installment sales Cost of installment sales 250,000440,000 Collections 300,000 600,000 ance's 2020 collection is inclusive of P100,000 accounts from 2019. Ising the accrual basis of accounting compute Lancelot's gross income subjed 360,000

ancelot is a dealer of household appliances. He reported the following in 201 | 2019 P500,000 P800,000 2020 Installment sales Cost of installment sales 250,000440,000 Collections 300,000 600,000 ance's 2020 collection is inclusive of P100,000 accounts from 2019. Ising the accrual basis of accounting compute Lancelot's gross income subjed 360,000

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter4: Gross Income: Concepts And Inclusions

Section: Chapter Questions

Problem 21CE: On January 1, 2019, Kunto, a cash basis taxpayer, pays 46,228 for a 24-month certificate. The...

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How do the all events and economic performance requirements apply to the following transactions by an accrual basis taxpayer? a. The company guarantees its products for six months. At the end of 2019, customers had made valid claims for 600,000 that were not paid until 2020. Also, the company estimates that another 400,000 in claims from 2019 sales will be filed and paid in 2020. b. The accrual basis taxpayer reported 200,000 in corporate taxable income for 2019. The state income tax rate was 6%. The corporation paid 7,000 in estimated state income taxes in 2019 and paid 2,000 on 2018 state income taxes when it filed its 2018 state income tax return in March 2019. The company filed its 2019 state income tax return in March 2020 and paid the remaining 5,000 of its 2019 state income tax liability. c. An employee was involved in an accident while making a sales call. The company paid the injured victim 15,000 in 2019 and agreed to pay the victim 15,000 a year for the next nine years.
Xinran, who is married and files a joint return, owns a grocery store. In 2019 his gross sales were 276,000, and operating expenses were 320,000. Other In 2020, Xinran provides the following information: The 2019 married filing jointly standard deduction is 24,400; Xinrans itemized deductions will exceed the 2020 standard deduction (after adjustment for inflation). The medical expense AGI floor is 10% in 2019. a. What is Xinrans 2019 NOL? b. Determine Xinrans taxable income for 2020.
Soong, single and age 32, had the following items for the tax year 2019: Salary of 30,000. Interest income from U.S. government bonds of 2,000. Dividends from a foreign corporation of 500. Sale of small business 1244 stock on October 20, 2019, for 20,000. The stock had been acquired two years earlier for 65,000. Business bad debt of 4,000. Nonbusiness bad debt of 5,000. Sale of small business 1244 stock on November 12, 2019, for 4,000. The stock had been acquired on June 5, 2019, for 800. Sale of preferred stock on December 4, 2019, for 40,000. The stock was acquired four years ago for 18,000. Total itemized deductions of 25,000 (no casualty or theft). a. Determine Soong's NOL for 2019- b. Assuming that Soong had taxable income for each of the last five years, deter mine to which years the 2019 NOL should be applied.
Marlene, a cash basis taxpayer, invests in Series EE U.S. government savings bonds and bank certificates of deposit (CDs). Determine the tax consequences of the following on her 2019 gross income: a. On September 30, 2019, she cashed in Series EE bonds for 10,000. She purchased the bonds in 2009 for 7,090. The yield to maturity on the bonds was 3.5%. b. On July 1, 2018, she purchased a CD for 10,000. The CD matures on June 30, 2020, and will pay 10,816, thus yielding a 4% annual return. c. On July 1, 2019, she purchased a CD for 10,000. The maturity date on the CD was June 30, 2020, when Marlene would receive 10,300.
Arthur Wesson, an unmarried individual who is age 68, reports taxable income of 510,000 in 2019. He records positive AMT adjustments of 80,000 and preferences of 35,000. Arthur itemizes his deductions, and his regular tax liability in 2019 is 153,694. a. What is Arthurs AMT? b. What is the total amount of Arthurs tax liability? c. Draft a letter to Arthur explaining why he must pay more than the regular income tax liability. Arthurs address is 100 Colonels Way, Conway, SC 29526.