On 01.10.20X1, TK transfers the annual rent of EUR 7,000 for the business and office space for one year in advance. Which of the following statements regarding business transactions in 20X1 is/are correct? O The annual rent reduces the profit in 20X1 by EUR 7,000. O Another liability must be recognized. O The payout is EUR 7,000 and the expense is EUR 1,750. O An anticipatory deferred item must be formed.
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- LO.2 In 2019, Chaya Corporation, an accrual basis, calendar year taxpayer, provided services to clients and earned 25,000. The clients signed notes receivable to Chaya that have a fair market value of 22,000 at year-end. In addition, Chaya sold a 36-month service contract on June 1, 2019, and received payment in full of 12,000. How much gross income does Chaya report from these transactions in 2019?On October 31, 20x4, Mr. Cruz bought properly from D'Vision Heights which had earlier cost the latter P250,000. The company received a dwon payment of P100,000 an a P400,0000 mortgage note payable in twenty equal semiannual installments plus 16% interest per annum an unpaid principal. Assuming the gross profit is recognized in the period of sale, the amount of gross profit to be recognized by D'Vision Heights in 20x6 would a. P 50,000 b. P 250,000In 2018, a domestic corporation paid for the monthly rental of a residential house of its branch manager, Mr. Juan dela Cruz, amounting to P156,000. Assume there is no transfer of ownership, what is the total amount of deductible expense by the employer from its gross income? a. Answer not given b. P120,000 c. P198,000 d. P156,000 e. P42,000
- On October 31 , 20x4 , Mr . Cruz bought property from D'Vision Heights which had earlier cost the latter P250,000 . The company received a down payment of P100.000 and a P400,000 mortgage note payable in twenty equal semiannual installments plus 16 % interest per annum on unpaid principal . Assuming the gross profit is recognized in the period of sole of gross profit to be recognized by D'Vision Heights in 20x6 would be :21- After our business deducted 20% income tax on 48.000 TL, which is the one-year rent of the workplace it rented for one year on 01.03.2020 , the rest was paid to the owner of the real estate from the bank. In accordance with the concept of periodicity, how much is the amount that should be accepted as an expense in the future period? a) 40.000 TL B) 8.000 TL NS) 9,600 TL D) 38,400 TL TO) 48,000 TLThe following are the some of the income payments of Treble Company, a domestic corporation, during the third quarter: • July 16 - Paid P150,000 passive royalties to a resident foreign corporation. The amount is gross of tax. • July 27 - The grand winner of its Midyear Pabuenas Raffle Promo cash out her P80,000 winnings, net of final tax. • August 17 - Paid the rentals for the use of a vessel owned by a non-resident lessor, P200,000 (gross of final tax). • August 31 - Hosted a competition where the grand prize for the winner was P50,000. • September 8 - Incurred and paid P250,000 to oil exploration service contractors. • September 30 - Declared and paid dividends to the following: P85,000 to resident citizens, P56,000 to resident aliens, P20,000 to non-resident aliens engaged in trade and P164,000 to domestic corporations. On the Form 1601FQ for the taxable quarter, what amount is applicable to?
- Smith Corp. sells goods to Magnus for $500,000, payment due in 18 months after the goods are delivered to Magnus. The related interest is $36,000. What is the transaction price? Will Smith recognize interest expense or interest income for this transaction?Jade Larson Antiques owes $20,000 on a truck purchased for use in the business. Assume the company makes timely principal payments of $5,000 each year at December 31 plus interest at 8%. Which of the following is true? a. After the first payment is made, the company owes $15,000 plus three years’ interest. b. After the first payment, $15,000 would be shown as a long-term liability. c. After the first payment is made, $5,000 would be shown as the current portion due on the long-term note. d. Just before the last payment is made, $5,000 will appear as a long-term liability on the balance sheet.Jade Larson Antiques owes $20,000 on a truck purchased for use in the business. Assume the company makes timely principal payments of $5,000 each year at December 31 plus interest at 8%. Which of the following is true? After the first payment is made, the company owes $15,000 plus three years’ interest. After the first payment, $15,000 would be shown as a long-term liability. After the first payment is made, $5,000 would be shown as the current portion due on the long-term note. Just before the last payment is made, $5,000 will appear as a long-term liability on the balance sheet.
- If the beginning balance in Swan, Inc.’s OAA is $6,700 and the following transactions occur, what is Swan’s ending OAA balance? Depreciation recapture income $ 21,600Payroll tax penalty (4,200) Tax-exempt interest income 4,012Nontaxable life insurance proceeds 100,000 Life insurance premiums paid (nondeductible) (3,007)On 1 st January, 2020 Mr. Abid ordered a number of motor vehicles whose cash price was Tk 25,000 and entered into a hire-purchase agreement to pay eight quarterly instalments of Tk 3,300 each. There was no down payment in the agreement. The first payment to be made on 31st March, 2020. The rate of interest is 5% per annum and the vehicles are to be depreciated at 10% per annum on the diminishing balance. Show the journal entries in the book of Mr. Abid for two year ended 31st Dec, 2020.Pat invites Tin to join him in his business. Tin agreed that the following adjustments are taken up in the books of Pat Prepaid expenses of P 10,000 and accrued expenses of P6,000 are to be recognized. Allowance for doubtful accounts on Pat's accounts receivable shall be increased by P10,000. Pat's capital before adjustment for the above items was P405,000. Tin will invest enough cash to make her equal to 60%. How much is Pat's adjusted capital balance?