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- Kate is an executive for the Cozy Furniture Manufacturing Company. She purchased furniture from the company for $9,500, the price Cozy ordinarily would charge a wholesaler for the same items. The retail price of the furniture was $12,500, and Cozy’s cost was $9,000. The company also paid for Kate’s parking space in a garage near the office. The parking fee was $600 for the year. All employees are allowed to buy furniture at a discounted price comparable to that charged to Kate. However, the company does not pay other employees’ parking fees. Kate’s gross income from the above is: answer choices: $3,500. $4,100. $-0-. $900 $600.Joe purchased a delivery van for his business through an online auction. His winning bid for the van was $24,500. In addition, Jose incurred the following expenses before using the van: shipping cost of $650; paint to match the other fleet vehicles at a cost of $1,000; registration costs of $3,200. Which included $3,000 of sales tax and an annual registration fee of $200; wash and detailing for $50; and an engine tune-up for $250. What is Jose’s cost basis for the delivery van?To support herself while attending school, Daun Deloch sold stereo systems to other students. During the first year of operations, Daun purchased the stereo systems for $260,000 and sold them for $370,000 cash. She provided her customers with a one-year warranty against defects in parts and labor. Based on industry standards, she estimated that warranty claims would amount to 2 percent of sales. During the year, she paid $4,020 cash to replace a defective tuner. Requireda. Prepare an income statement and statement of cash flows for Daun’s first year of operation. b. Based on the information given, what is Daun’s total warranties liability at the end of the accounting period?
- Thabitha works for Lobatse Clayworks Limited, a company that specializes in manufacturing ceramic products as well as special heat resistant face bricks used mainly in industrial processes. During the financial year ended 31 December 2022, she received amounts as shown below: A company vehicle for private use with a value of P480,000 with annual running costs of P18,000 paid by the company Tickets and booking to the value of P15,000 to go on her annual holiday as part of her condition of employment. Received free meals for P7,500 during the year from the company canteen Refund of P5,000 for medical expenses from Pula Medical Aid Society, her medical aid provider Dividends of P12,550 for shares held in a local company. Won a Jackpot of P50,500 from Cumberland Casino Share option offer from employer of 10,800 shares in the company at a price of P1.80 each, the current market price of the shares is P2.30 each Received a subsidy of P125,000 from government programme for Horticultural…To support herself while attending school, Daun Deloch sold stereo systems to other students. During the first year of operations, Deloch purchased the stereo systems for $138,000 and sold them for $258,000 cash. She provided her customers with a one-year warranty against defects in parts and labor. Based on industry standards, she estimated that warranty claims would amount to 6 percent of sales. During the year, she paid $1,480 cash to replace a defective tuner. Required a-1. Prepare an income statement for Deloch’s first year of operation. a-2. Prepare a statement of cash flows for Deloch’s first year of operation.An air-conditioning contractor is installing a heat pump system in a privatehome. He has agreed to do the job for the cost of parts and labor plus acontractor’s fee of 9% of the total. The heat pump costs $1,495, the electricalsupplies $53, the ducting $81, and the other supplies $39. Three men work16 hours each to install the system. They are paid $14 per hour. Sales tax is6% of the subtotal of the cost for parts, labor, and contractor’s fee.a. What is the total cost for parts and labor?
- During 2022, BLC Corporation leased a car for its employee Carmen, at a monthly cost of $983, including all taxes. BLC paid $7043 for the operating costs of the car during 2022. Carmen used the car for 11 months during the year and during the months of non-use, it was returned to BLC's premises. During the year, he drove the car a total of 26031 kilometers of which 16716 kilometers were for personal travel and the remainder was for employment-related use. Calculate Carmen's total taxable benefit arising from the use of the car in 2022.Allan’s employer purchased a car in March 2019 at a cost of $44,000 GST inclusive and provided the car to Allan on 1 July 2019. Allan garages the car at his home each night from 1 July 2019 to 31 March 2020, excluding the month of December 2019. Allan travelled 40,000 kilometres in the car during the year, and the odometer and logbook records show that 20,000 kilometres were for business purposes and 20,000 kilometres were for private purposes. The operating costs of the car (not including deemed depreciation and deemed interest) were $9,000 (GST inclusive). Allan did not make any contribution but provided all the necessary documents for his employer to calculate his FBT liability. Question Assuming the employer elects to use the operating cost basis, explain and calculate the taxable value of the car fringe benefit and the FBT consequences for Allan’s employer.Jos is a Sales Manager. He uses his own car to travel to various locations. He acquired the car on 1 October 2021 for $60,000. The acquisition cost was funded entirely by a loan at an interest rate of 15%. He has determined that the depreciation deduction on the car would be $2,300 for the year. In addition, Jos incurred the following expenses during the year: Registration and insurance = $2,000; Repairs and maintenance = $1,000; and Oil and fuel costs = $1,500. For the period 1 October 2021 to 30 June 2022, Jos estimates that the car travelled 15,000 kilometres, 12,000 of which were for business purposes. You may assume that Jos has maintained all necessary records and a logbook. Required: Calculate Jos's deduction for car expenses under the two methods (cent per kilometre rate 0.72 and logbook) in Div 28 of Income Tax Assessment Act 1997. Assume that depreciation has been adjusted for part-year use and the impact of the car limit
- Mica is the chief chemist of V Medical Hospital Inc. As reward for good performance, she was sent by her employer to the United States to attend a 3-day convention of International Association of Medical technologists. She was booked on a first class ticket that cost the company US $2,000 ($1=P50) for a round trip ticket. Economy ticket costs only $1,200. She was likewise given an allowance to bw used for her meals and local transportation at a rate of US $100 daily which is subject to liquidation. The amount of fringe benefit-tax is---Thomson Printing Company is a buyer and seller of used machinery. On April 10, the president of the company, James Thomson, went to the surplus machinery department of B.F. Goodrich Company in Akron, Ohio, to examine some used equipment that was for sale. Thomson discussed the sale, including a price of $9,000, with Ingram Meyers, a Goodrich employee and agent. Four days later, on April 14, Thomson sent a purchase order to confirm the oral contract for purchase of the machinery and a partial payment of $1,000 to Goodrich in Akron. The purchase order contained Thomson Printing’s name, address, and telephone number, as well as certain information about the purchase, but did not specifically mention Meyers or the surplus equipment department. Goodrich sent copies of the documents to a number of its divisions, but Meyers never learned of the confirmation until weeks later, by which time the equipment had been sold to another party. Thomson Printing brought suit against Goodrich for breach…On July 1, 2018, Brent purchases a new automobile for $40,000. He uses the car 80% for business and drives the car for business purposes as follows: 8,000 miles in 2018, 19,000 miles in 2019, 20,000 miles in 2020, and 15,000 miles in 2021. Brent uses the actual cost method. [Assume that no § 179 expensing is claimed and that 200% declining-balance cost recovery with the half-year convention is used. The recovery limitation for an auto placed in service in 2018 is as follows: $10,000 (first year), $16,000 (second year), $9,600 (third year), and $5,760 (fourth year).] a. Compute his depreciation deductions for the years 2018, 2019, 2020, and 2021. What is Brent's adjusted basis in the auto on January 1, 2022?