
Concept explainers
For each of the following please identify if the business is a Corporation, Proprietorship, or
1) Georgette Green begins a pet care busines by invesgting $5,000. At the end of the year, she wil include the business income or lss on her personal income tax return.
2)Additional paid-in-capital for the Trailblazer Compay is $8 per share
3)Bronson Company presents a statement of
4) Jean Johnoson home health care business does not have liability separate from herself.
5) Grand Canyon Company's retained earnings balance is 5 million
6) Jim Moore and his daughter, Jenna Moore, agree that 60% of their company's net profit will go to Jim and 40% of the net profit will go to Jenna.
7) Michael Johnson and Joaquin Nunoz each invested $10,000 in their computer consulting business, and received shares of the company's stock in exhange for their investments. (Side note: Will you also explain how they received shares from a business that they invested in themselves? It's their company and if there is stock wouldn't it automatically belong to them?)
8) Tamara Bryant's veterinary clinic has separate liablity. She is the only owner.
9) Alan and David Washington own an automobile repair garage. Alan's capital balance is $8,000 and David's capital balance $7,000
10) Crown Candy Company presents statement of owner's capital in its annual financial statements.
Question 2: Please identify the following as either a Proprietorship, Parntership, or Corporation
1) Johnson, Capital
2) Common Stock
3) Statement of capital contain two capital accounts
4) Par value
5)
6) Partners' capital, December 31
7) Statement of capital containing one capital account
8)Retained Earnings
9)Jones, Drawings
10) Additional paid-in-capital

Trending nowThis is a popular solution!
Step by stepSolved in 2 steps

- uong Corporation, a calendar year, accrual basis corporation, reported $1 million of net income after tax on its financial statements prepared in accordance with GAAP. The corporation’s books and records reveal the following information: Luong’s federal income tax expense per books was $200,000. Luong’s book income included $10,000 of dividends received from a domestic corporation in which Luong owns a 25 percent stock interest, and $4,000 of dividends from a domestic corporation in which Luong owns a 5 percent stock interest. Luong recognized $10,000 of capital losses this year and no capital gains. Luong recorded $8,000 of book expense for meals not provided by a restaurant and $10,000 of book expense for entertainment costs. Luong's depreciation expense for book purposes totaled $400,000. MACRS depreciation was $475,000. Required: Compute Luong's federal taxable income and regular tax liability.arrow_forwardJhumpa, Stewart, and Kelly are all one-third partners in the capital and profits of Firewalker General Partnership. In addition to their normal share of the partnership's annual income, Jhumpa and Stewart receive an annual guaranteed payment of $10,000 each to compensate them for additional services they provide. Firewalker's income statement for the current year reflects the following revenues and expenses: Sales revenue Interest income Long-term capital gains Cost of goods sold Employee wages Depreciation expense Guaranteed payments Miscellaneous expenses (20,000) (4,500) Overall net income $ 97,000 Note: Leave no answer blank. Enter zero if applicable. Description Problem 09-64 Part b (Static) b. How will Firewalker allocate ordinary business income and separately stated items to its partners? Note: Round your intermediate calculations and final answers to the nearest whole dollar amount. Interest income Long-term capital gain Guaranteed payments Self-employment income $ 340,000…arrow_forwardNicole organized a new corporation. The corporation began business on April 1 of year 1. She made the following expenditures associated with getting the corporation started: Expense Attorney fees for articles of incorporation March 1-March 30 wages March 1-March 30 rent Stock issuance costs. April 1-May 30 wages Note: Leave no answer blank. Enter zero if applicable. Problem 10-73 Part a (Algo) Date February 10 Amount $ 32,500 March 30 4,000 March 30 2,050 April 1 40,000 May 30 10,000 a. What is the total amount of the start-up costs and organizational expenditures for Nicole's corporation? Start-up costs Organizational expendituresarrow_forward
- Ted Coverdale and Jim Kulak set up a new limited liability company on May 16, 2020. Ted contributes a warehouse and land worth a combined $1,098,000. Market value of the warehouse is $264,000. Jim contributes $893,000 in cash. Write the journal entry to record the contributions to the LLC.arrow_forwardKaranarrow_forward[The following information applies to the questions displayed below.] Ries, Bax, and Thomas invested $80,000, $112,000, and $128,000, respectively, in a partnership. During its first calendar year, the firm earned $249,000. Required: Prepare the entry to close the firm's Income Summary account as of its December 31 year-end and to allocate the $249,000 net income under each of the following separate assumptions. 2. The partners agreed to share income and loss in the ratio of their beginning capital investments. Complete this question by entering your answers Appropriation General of profits Journal Allocate $249,000 net income in the ratio of their begin (Do not round intermediate calculations.) Supporting Percentage of Total Computations Equity Ries Bax Thomas x X X Income Summary $ 249,000 $ 249,000 $ 249,000 Allocated Income to Capitalarrow_forward(2) Example 3 (Equity: Business Ownership): Hanna, Ursula, Thomas and Günther engage in a partnership named "Chick Enterprise. // Chick generates a net income of 75.000 $. 1) Ursula, Thomas and Günther get salary allowances for thei extra professional service for At clients, as follows: 12.000$ for Ursula; 9.000 $ for Thomas and 3.000 for Günther respectively. 11) Average capital balances during the year are as follows: Hanna Ursula Thomas Gunther 42.000 $ 4.200 $ 12.600 $ 25.200 $ Partners agreed for a 7.25 interest allowance for each partner at the end of the year. 84.000 $ [II) After salary & interest allowances, the remainder will be allocated from a fixed ratio of [5:2:4:1] for [Hanna: Ursula: Thomas: Günther Find each partner's capital (equity) and do the closing entry Example 4 (Equity: Business Ownership): Royal Inc. posesses a capital structure as follows: Luis 20 Hector 10 Sanchez 10 (in.000 $) 2) On March 1, Luis decides to sell 10 $ of his share to Martin. 3) On May 1,…arrow_forwardLuong Corporation, a calendar year, accrual basis corporation, reported $1.15 million of net income after tax on its financial statements prepared in accordance with GAAP. The corporation's books and records reveal the following information: • Luong's federal income tax expense per books was $203,000. • Luong's book income included $13,000 of dividends received from a domestic corporation in which Luong owns a 25 percent stock interest, and $5,500 of dividends from a domestic corporation in which Luong owns a 5 percent stock interest. Luong recognized $13,000 of capital losses this year and no capital gains. • Luong recorded $9,600 of book expense for meals not provided by a restaurant and $11,500 of book expense for entertainment costs. • Luong's depreciation expense for book purposes totaled $403,000. MACRS depreciation was $475,000. Required: a. Compute Luong's federal taxable income and regular tax liability. b. Prepare a Schedule M-1, page 6, Form 1120, reconciling Luong's book…arrow_forwardCroyden is a calendar year, accrual basis corporation. Mr. and Mrs. Croyden (cash basis taxpayers) are the sole corporate shareholders. Mr. Croyden is president of the corporation, and Mrs. Croyden is vice president. Croyden’s financial records, prepared in accordance with GAAP, show the following information for the year: Use Table 7-1 and Table 7-2 Revenues from sales of goods $ 12,900,000 Cost of goods sold (LIFO) (9,260,000) Gross profit $ 3,640,000 Bad debt expense $ 24,000 Administrative salaries and wages 612,000 State and local business taxes 135,000 Interest expense 33,900 Advertising 67,000 Annual property insurance premiums 19,800 Annual life insurance premiums 7,300 Depreciation expense 148,800 Repairs, maintenance, utilities 81,000 Croyden’s records reveal the following facts: Under the UNICAP rules, Croyden had to capitalize $142,800 of administrative wages to inventory. These wages were expensed for financial statement purposes. Because of…arrow_forwardMabel, Loretta, and Margaret are equal partners in a local restaurant. The restaurant reports the following items for the current year: Revenue $ 520,000 Business expenses 270,000 Investment expenses 138,000 Short-term capital gains 128,000 Short-term capital losses (177,100) Each partner receives a Schedule K-1 with one-third of the preceding items reported to her. Required: How must each individual report these results on her Form 1040? Schedule A: Schedule B: Schedule C:arrow_forwardOn July 1, 2020, Wency and William agreed to form a partnership from their respective proprietorship businesses and to share profits equally. Wency and William’s balance sheet before the formation were: Wency William Cash P 6,000 P 15,000 Accounts receivable 36,000 21,000 Merchandise inventory 99,000 126,000 Prepaid rent 12,000 Store equipment 120,000 90,000 Accum. Depreciation ( 45,000) ( 54,000) Building 375,000 Accum. Depreciation (75,000) Land 180,000 - Totals P 696,000 P 210,000 Accounts payable P 22,500 P 9,000 Mortgage payable 180,000 - Capital 493,500 201,000 Totals P 696,000 P 210,000 The fair values of Wency’s and William’s assets were: Wency William Merchandise inventory P 81,000 P 135,000 Prepaid rent - 0 Store equipment 45,000 19,500 Building 750,000 -…arrow_forwardDog Subject: acountingarrow_forwardarrow_back_iosSEE MORE QUESTIONSarrow_forward_ios
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education





