Blackburn Corporation is a calendar year taxpayer. Every year on September 1, Blackburn enters into a contract with Smith Company for Smith to provide cleanup and winterization services for its grounds and buildings. The amount paid on September 1 when the contract is signed is $7,500 and the contract runs from December of the same year through March of the following year. When may Blackburn deduct the amount paid on September 1, 2020?

Q: According to Tax Accounting rules, which of the following expenses have been incurred (and thus…

A: Tax is the charge levied by the central or state government on the income, capital gain or sale…

Q: Vernon is a cash basis taxpayer with a calendar tax year. On October 1, 2020, Vernon entered into a…

A: General rule vs 12 months for prepaid expense for Cash basis taxpayer The general rule is stating…

Q: During 2020, Ms. Black’s employer provides her with a company-owned automobile for 11 months of the…

A: During 2020, Ms. Black's employer provides company owned automobile for 11 months of year. Cost =…

Q: Firm B, a calendar year, cash basis taxpayer, leases lawn and garden equipment. During December, it…

A: The total amount of money received by the taxpayer from all sources throughout the taxable year is…

Q: At the end of 2019, Ms. Shelly Sampson has unused RRSP deduction room of $6,000 and undeducted RRSP…

A: The following calculations are done for Ms. Shelly Sampson.

Q: In 2020, Nadia has $100,000 of regular taxable income. She itemizes her deductions as follows: real…

A: By taking ordinary income and incorporating disallowed items and credits including state and local…

Q: An accountant agrees to perform $410 of tax services for an auto mechanic who has agreed to perform…

A: TAXABLE INCOME YEAR ACCOUNTANT MECHANIC 2021 $410 $0…

Q: government employee at daytime and accepts clients for accounting work after office hours. At the…

A: A self employed individual who registered under VAT and whoes gross receipts or gross sale is not…

Q: The taxpayer is a resident citizen and the taxable period is the 2nd quarter.…

A: On an accrual basis, An expense is charged in the profit and loss account that is incurred in the…

Q: Stephanie began her consulting business this year, and on April 1 Stephanie received a $9,000…

A: Amount received for three year contract is:::9000$.. Amount of months=36 months ie 3 years...…

Q: How much is the VAT payable as at January 31, 2020?

A: Vat payable amount is the amount which requires to be paid to the government or tax authority which…

Q: The taxpayer is a resident citizen and the taxable period is the 2nd quarter.…

A: Cash basis accounting: In cash basis accounting, revenue is recognized when payment is received and…

Q: XYZ, Inc. is an accrual basis taxpayer with a calendar year end. XYZ received $72,000 cash on August…

A: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: Maud, a calendar year taxpayer, is the owner of a sole proprietorship that uses the cash method. On…

A: Maud can deduct the full $120,000. the answer is $120,000.   Explanation: Therefore, Maud is…

Q: Mow-Money is a landscaping company in Virginia that files as a C corporation using the accrual…

A: The accrual basis of accounting assumes that all the revenues earned during the accounting period…

Q: During the summer of 2019, college student Jason worked for his uncle, a painting contractor, for…

A: Tax is a charge which is charged on the taxable income of a taxpayer. A self-employment tax is…

Q: Corporation, a cash basis taxpayer, received $10,000 from a customer in 2019. In that year, the…

A: Whenever the taxes you had already paid exceed your entire tax burden, the government reimburses you…

Q: Jeremy is a calendar-year taxpayer who sometimes leases his business equipment to local…

A: Solution In accrual accounting concept, transactions are recorded when they are incurred rather than…

Q: The taxpayer is a resident citizen and the taxable period is the 2nd quarter.…

A: Cash basis accounting: In cash basis accounting , revenue are recognized when payment is received…

Q: Vicki Vale operates a convenience store while at the same time offers bookkeeping services to her…

A: Taxable income is the one which is computed after deducting the expenses from the revenues. It also…

Q: For the 2019 taxation year, Sylvia Ivany has net employment income of $90,000, spousal support…

A: The RRSP deduction limit is the amount that can be deposited as an RRSP contribution. This is…

Q: The taxpayer is a resident citizen and the taxable period is the 2nd quarter.…

A: Cash basis accounting: In cash basis accounting , revenue are recognized when payment is received…

Q: TPW, a calendar year taxpayer, sold land with a $540,000 tax basis for $775,000 in February. The…

A: Gain on disposal of land as per book = Total amounts received for land - Adjusted tax basis Gain on…

Q: Drake Appliance Company, an accrual basis taxpayer, sells home appliances and service contracts.…

A: Accrual basis means to report the transactions irrespective of the actual cash receipt or paid.

Q: Bugzap, a calendar year accrual basis taxpayer, is engaged in the pest control business, providing…

A: The revenue recognition principle defines the timing and amount of revenue that an organization…

Q: During 2021, Inez (a single taxpayer) had the following transactions involving capital assets: Gain…

A: b(i) Here, Inez is in the 32% tax bracket, so her regular tax rate of 32% exceeds the alternative…

Q: An individual suffered injuries in a vehicular accident in 2020. Consequently, he incurred and paid…

A: Here discuss about the taxation determination of the settlement of the claim which was received in…

Q: Can he revoke his registration the following year opts to pay decides that he wants revert back as…

A: A taxpayer voluntarily opted to pay VAT even though his sales and receipts are not expected to…

Q: Assume Hom held the sculpture for 4 months and the $700 ($1,700 − $1,000) of appreciation is a…

A:

Q: TPW, a calendar year taxpayer, sold land with a $567,000 tax basis for $855,000 in February. The…

A: Book income is the income that the company reports before taxes, i.e. it is the amount that the…

Q: Ms.Angel is a prominent independent contractor who offers architectural and engineering…

A: Deduction- Deduction refers to the charge that is allowed to be deducted from the annual gross…

Q: A taxpayer pays $2,400 in points when taking out a 15-year loan to buy a vacation home. If the…

A: The word point is used to describe such costs charged in order to secure a home mortgage. The point…

Q: TPW, a calendar year taxpayer, sold land with a $549,000 tax basis for $845,000 in February. The…

A: Deferred tax liability is a tax that is assessed or is expected for the current period but has not…

Q: Gemini Auto Repair is a calendar year taxpayer. In 2019, the repair shop purchased a light weight…

A:

Q: In the current year, Wilson Enterprises, a calendar year taxpayer, suffers a casualty loss of…

A: Given: Casualty loss = $90,000 Wilson's AGI = $225,000 Recovered insurance = $50,000

Q: Jeremy is a calendar-year taxpayer who sometimes leases his business equipment to local…

A: Income under cash method is:::$2100 Since income is recognised when cash is received..... Since…

Q: He belongs to a medical aid fund to which he contributed R3 000 per month to during the year of…

A: Introduction: When one account incurs expenditures or receives money on behalf of one or more other…

Q: TPW, a calendar year taxpayer, sold land with a $560,000 tax basis for $850,000 in February. The…

A: Given Information : Purchaser paid = Cash + Interest bearing note                           =…

Q: For his business, McKenzie purchased qualifying equipment that cost $212,000 in 2019. The taxable…

A: § 179 expense deduction allows deduction for the purchase of qualifying assets. The limit was…

Q: The taxpayer is a resident citizen and the taxable period is 2021. Compute for the GROSS income…

A: Gross income: It implies to the income before deducting for any operating expenses incurred by the…

Q: John, who files as a single taxpayer, had AGI of $90,000 for 2020. He incurred to following expenses…

A: Social tax security is a compulsory contribution of employer and employee. It funds the retirement,…

Q: The taxpayer is a resident citizen and the taxable period is the 2nd quarter.…

A: Taxable income using cash basis in the 2nd quarter = Collections for services rendered in 2nd…

Q: Maud, a calendar year taxpayer, is the owner of a sole proprietorship that uses the cash method. On…

A: Tax or Taxes: Tax is an amount paid by the persons (individuals and business entities) to a…

Q: Gary owns a commercial building and leased his premises to John to conduct a bakery business. Under…

A: Lease is an agreement between two parties under which one party grants the right to use the asset to…

Q: During the tax year, Jose paid $10,000 for eligible tuition. In 2021, how much of this spending is…

A: Deduction U/S 80C for individual and High-income tax Act 1961 Deduction available for payment of…

Q: During the year, Natalie rented out the condo for 75 days, receiving $10,000 of gross income. She…

A: Given Information Insurance = 1,000 Advertising Expense = 500 Mortgage Interest = 3,400 Property…

Q: Jose paid $10,000 for qualified tuition during the tax year

A: Deduction U/S 80C for individuql and HUF,Income tax Act 1961 Deduction available for payment of…

Q: The taxpayer is a resident citizen and the taxable period is the 2nd quarter.…

A: Cash basis accounting: In cash basis accounting, revenue is recognized when payment is received and…

Q: Milly, the wife of a notorious criminal and underworld gang leader, has signed a contract with a…

A: a. Gross income less the adjustments and available tax deductions equal taxable income. The gross…

Q: Heron Corporation, a calendar year, accrual basis taxpayer, provides the following information for…

A: Schedule M-1 is prepared to reconcile the entity's books and records with its taxable income. It is…

Contract Costing

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.