Discuss the possible outcomes of this situation considering his assets and the business assets.
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Chino is the sole proprietor of Kahit Saan Restaurant. COVID-19 pandemic came, his restaurant is no longer doing good and is on the verge of closing. Prior to pandemic, Chino secured a total Php 100,000.00 from various creditors to expand his restaurant operation. However, he is having a hard time paying his loans and creditors are running after him. Discuss the possible outcomes of this situation considering his assets and the business assets.
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- Mrs. Ryes, a sole proprietor doing business under the trade name “Cheesy Cakes’, had seen her business booming because of the introduction of the hit flavor Red Macaroon Velvet Cakes. However, a series of natural disasters and misinformed business decisions had caused Mrs. Ryes to suffer losses, the details of which follow: An equipment with book value of P400,000 that was inundated by floods. The equipment was not insured and can be repaired for P500,000 to be reusable again. Another equipment with a book value of P330,000 and a fair market value of P440,000 swept by the same flood. The equipment is totally lost and is insured only up to P100,000 Also swept in the same flood are Mrs. Reyes’ appliances inside her home. The appliances were purchased two years ago at an aggregate cost of P1,000,000 with an expected useful life of 5 years How much loss can be claimed by Mrs. Reyes as an allowable deduction?Dr. Roger Jones is a successful dentist but is experiencing recurring financial difficulties. Forexample, Dr. Jones owns his office building, which he leased to the professional corporation thathoused his dental practice. (He owns all shares in the corporation.) After the corporation’s failure to pay payroll taxes for the past 6 months, however, the Internal Revenue Service is threatening to impound the business and sell its assets. Also, the corporation has had difficulty payingits suppliers, owing one of them over $200,000 plus interest. In the past, Dr. Jones had borrowedmoney on the equity in either his personal residence or his office building, but he has grownweary of these recurring problems and has hired a local consultant for advice.According to the consultant, the financial difficulties facing Dr. Jones have been caused bythe absence of proper planning and control. Budgetary control is sorely needed. The followingfinancial information is available for a typical month:…Willie Waylon is a famous country and western singer. As an investment, Willie started a chain of barbecue restaurants called Willies Wonderful Ribs. Willie's friends and associates invested $500,000 in this venture. The restaurant chain failed and the investors lost all their money. Because of his visibility and status in the entertainment community, Willie felt that he personally had to make good on the losses suffered by the investors, to protect his singing and business reputation. Consequently, he personally paid $500,000 to reimburse the investors for their losses. What are Willie's tax consequences (if any) from the reimbursement?
- Ekon owns a small tow-truck business that responds to state patrol requests to tow cars involved in wrecks, as well as to private business requests from customers at various auto repair shops and individuals with stalled autos. Ekons business is open 24/7 for 365 days a year. He is starting to see too many repairs on his three trucks, which either means that he loses business or must divert a truck from another area. He is now trying to consider whether it is best to continue use of the current trucks or whether he needs to invest some money in new trucks. Using the steps for the process of capital decision-making, create an outline with sub-steps that include questions Ekon can use to guide his investigation or considerations of buying new truck.The Dotson Company, owner of Bleacher Mall, charges Rich Clothing Store a rental fee of $600 per month plus 5% of yearly profits over $500,000. Matt Rich, the owner of the store, directs his accountant, Ron Hamilton, to increase the estimate of bad debt expense and warranty costs in order to keep profits at $475,000. Instructions Answer the following questions. a. Should Hamilton follow his boss’s directive?. b. Who is harmed if the estimates are increased? c. Is Matt Rich’s directive ethical?The Client: Darius Williams, 44 is a single father with three-year-old twin boys, who just lost his job as a Finance Analyst. He was employed for nine (9) years with Vroom Finance, a vehicle financing company. Management decided to restructure the company to cut costs and stay competitive. As a result, Darius, along with seven (7) other employees was made redundant. USD$45,496 in cash by the severance laws in the country. Proceeds of USD$19,775 from the company pension plan. If he decides to take cash, he will be taxed 25% by the government. The other alternative is to roll the funds into a new pension plan without penalties or taxes. He now has one month to decide. Three (3) months of health insurance. There are two weeks of coverage left. Three months of life insurance, with the option to continue the plan as an individual. He now has one (1) month to decide. Although losing his job was a huge shock, Darius immediately started looking for new employment. The job market was…
- George lost his $155,000 sales job. It took him a year to find a new job and, during that time, his utilities were shut off, he foreclosedon his home, and he declared bankruptcy. Ten years from now, what information from this time will remain on his credit report?After a wedding, ten people were hospitalized possibly as a result of food poisoning from products sold by Bane Inc. Legal proceedings are started seeking damages amounting to ₱500,000 for damages, ₱1,000,000 for the hospitalization expenses and ₱400,000 for the lost income of the patients. Bane Inc.’s lawyers advise that owing to the developments in the case, Bane Inc. will most likely be found liable and lose the case. How will this event be recorded in the financial statements? a. Record a journal entry and make a note disclosure. b. Make a note disclosure only. c. Record a journal entry without any note disclosure. d. Neither journal entry nor note disclosure is needed.Xander was hit by a wayward bus while on his way to work. He survived but had to pay P500,000 for his hospitalization. He was unable to work for 7 months which meant that he did not receive his usual salary of P10 000 a month or a tolal of P60,000. He sued the bus company and was able to abtain a final judgment awarding him the following: P100,000 as reimbursement for his hospitalization; P60,000 for the solories he foiled io receive while hospitalize d P200.000 as moral damages fer his pain and suitering. arid -P100,000 as exemplary damages. He was able to collect in full from the judgment. How much is excluded from gross income?
- The owner of a small furniture manufacturer is retiring and is interested in selling the business to her fifteen employees. The firm owns all its building and equipment and has inventory of wood, finished products it values at $50,000, and an existing mortgage loan with a $100,000 balance. The owner is asking $1,000,000 for the business and all its assets. Assuming the employees do not simply have $1M cash on hand, identify and explain which source(s) of financing would support the transaction?Dalisay was hit by a wayward bus while on his way to work. He survived but had to pay P400,000 for his hospitalization. He was unable to work for 6 months which meant that he did not receive his usual salary of P10 000 a month or a tolal of P60,000. He sued the bus company and was able to abtain a final judgment awarding him the following: P400,000 as reimbursement for his hospitalization; P60,000 for the solories he foiled io receive while hospitalize d P200.000 as moral damages fer his pain and suffering. -P100,000 as exemplary damages. He was able to collect in full from the judgment. How much is excluded from gross income? Zero P300,000 P700,000 P760,000Accounting Plaza Bistro is a restaurant and bar business in the northern suburbs. The Bistro has acquired a large base of loyal customers and established a name for itself during its 15 years of operation. Unfortunately, due to the effect of the pandemic, the owner can no longer sustain the business and it has to be put on sale.Adrian has been in the restaurant business for many years and is interested to buy Plaza Bistro. His negotiation for buying were going well until it came to evaluating the value for Inventory Ordering System (IOS). Adrian reasons that the IOS is not worth much as it is an old version, but the owner insists that the system has been routinely maintained and all problems have been fixed during its many years of trial run, making it very efficient and an essential part of the business. 1) Advise Adrian of two approaches (measurements) that can be used to evaluate the Inventory Ordering System (IOS). 2) Suggest what information (in three examples) Adrian should…