Problem 6: Income InclusionsTed Crisp reports the following transactions for 2022:• In exchange for providing consulting services Ted entered into anagreement to receive a bag of diamonds with a fair market value of$25,000. The diamonds are delivered to a warehouse in Ted's town on12/20/2022 but he doesn't pick them up until 01/15/2023.• On January 1st, Ted made a loan in the amount of $110,000 to his co-worker Lem so that Lem could purchase Bitcoin. He didn't charge Lemany interest on the loan. The applicable federal funds rate for 2022was 10% and Lem had net investment income of $500.• His employer, Veridian Dynamics, provided Ted with product discountsin the amount of $5,000. The discounts are offered to all employees.• Ted purchases stock in Alibaba, Ltd for $20,000. The stock is worth$5,000 on 12/31/2022.• Ted invests in an S-corp for a 10% ownership interest. The S-corpearned total profits of $500,000 and distributed cash of $40,000 toTed.Required: How much must Ted include in his 2022 gross income as a resultof the above transactions?

Taxable income is calculated on an accrual basis. If the accrued income is more than the cash…

Answered: Problem 6: Income Inclusions Ted Crisp…

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter19: Corporations: Distributions Not In Complete Liquidation

Section: Chapter Questions

Problem 2RP

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Capstone Consulting Services acquired land 5 years ago for $200,000. Capstone recently signed an agreement to sell the land for $375,000. In accordance with the sales agreenwnt, the buyer transferred $375,000 to Capstone’s bank account on February 20. How would elements of the accounting equation be affected by the sale?
Taylor Company recently purchased a piece of equipment for $2,000 which will be paid within 30 days after delivery. At what point would the event be recorded in Taylors accounting system? When Taylor signs the agreement with the seller When Taylor receives an invoice (a bill) from the setter When Taylor receives the asset from the seller When Taylor pays $2.000 cash to the seller
The transactions completed by PS Music during June 2019 were described at the end of Chapter 1. The following transactions were completed during July, the second month of the businesss operations: July 1.Peyton Smith made an additional investment in PS Music by depositing 5,000 in PS Musics checking account. 1.Instead of continuing to share office space with a local real estate agency, Peyton decided to rent office space near a local music store. Paid rent for July, 1,750. 1.Paid a premium of 2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period. 2.Received 1,000 cash from customers on account. 3.On behalf of PS Music, Peyton signed a contract with a local radio station, KXMD, to provide guest spots for the next three months. The contract requires PS Music to provide a guest disc jockey for 80 hours per month for a monthly fee of 3,600. Any additional hours beyond 80 will be billed to KXMD at 40 per hour. In accordance with the contract, Peyton received 7,200 from KXMD as an advance payment for the first two months. 3.Paid 250 to creditors on account. 4.Paid an attorney 900 for reviewing the July 3 contract with KXMD. (Record as Miscellaneous Expense.) 5.Purchased office equipment on account from Office Mart, 7,500. 8.Paid for a newspaper advertisement, 200. 11.Received 1,000 for serving as a disc jockey for a party. 13.Paid 700 to a local audio electronics store for rental of digital recording equipment. 14.Paid wages of 1,200 to receptionist and part-time assistant. Enter the following transactions on Page 2 of the two-column journal: 16.Received 2,000 for serving as a disc jockey for a wedding reception. 18.Purchased supplies on account, 850. July 21. Paid 620 to Upload Music for use of its current music demos in making various music sets. 22.Paid 800 to a local radio station to advertise the services of PS Music twice daily for the remainder of July. 23.Served as disc jockey for a party for 2,500. Received 750, with the remainder due August 4, 2019. 27.Paid electric bill, 915. 28.Paid wages of 1,200 to receptionist and part-time assistant. 29.Paid miscellaneous expenses, 540. 30.Served as a disc jockey for a charity ball for 1,500. Received 500, with the remainder due on August 9, 2019. 31.Received 3,000 for serving as a disc jockey for a party. 31.Paid 1,400 royalties (music expense) to National Music Clearing for use of various artists music during July. 31.Withdrew 1,250 cash from PS Music for personal use. PS Musics chart of accounts and the balance of accounts as of July 1, 2019 (all normal balances), are as follows: Instructions 1. Enter the July 1, 2019, account balances in the appropriate balance column of a four-column account. Write Balance in the Item column and place a check mark () in the Posting Reference column. (Hint: Verify the equality of the debit and credit balances in the ledger before proceeding with the next instruction.) 2. Analyze and journalize each transaction in a two-column journal beginning on Page 1, omitting journal entry explanations. 3. Post the journal to the ledger, extending the account balance to the appropriate balance column after each posting. 4. Prepare an unadjusted trial balance as of July 31, 2019.
The transactions completed by PS Music during June 2019 were described at the end of Chapter 1. The following transactions were completed during July, the second month of the business's operations: July 1. Peyton Smith made an additional investment in PS Music by depositing 5,000 in PS Music's checking account. 1. Instead of continuing to share office space with a local real estate agency, Peyton decided to rent office space near a local music: store. Paid rent for July, 1,750. 1. Paid a premium of 2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period. 2. Received 1,000 cash from customers on account. 3. On behalf of PS Music, Peyton signed a contract with a local radio station, KXMD, to provide guest spots for the next three months. The contract requires PS Music to provide a guest disc jockey for SO hours per month for a monthly fee of 3,600. Any additional hours beyond SO will be billed to KXMD at 40 per hour. In accordance with the contract, Peyton received 7,200 from KXMD as an advance payment for the first two months. 3. Paid 250 to creditors on account. 4. Paid an attorney 900 for reviewing the July 3 contract with KXMD. (Record as Miscellaneous Expense.) 5. Purchased office equipment on account from Office Mart, 7,500. 8. Paid for a newspaper advertisement, 200. 11. Received 1,000 for serving as a disc jockey for a party. 13. Paid 700 to a local audio electronics store for rental of digital recording equipment. 11. Paid wages of 1,200 to receptionist and part-time assistant. Enter the following transactions on Page 2 of the two-column journal: 16. Received 2,000 for serving as a disc jockey for a wedding reception. 18. Purchased supplies on account, 850. July 21. Paid 620 to Upload Music for use of its current music demos in making various music sets. 22. Paid 800 to a local radio station to advertise the services of PS Music twice daily for the remainder of July. 23. Served as disc jockey for a party for 2,500. Received 750, with the remainder due August 4, 2019. 27. Paid electric bill, 915. 28. Paid wages of 1,200 to receptionist and part-time assistant. 29. Paid miscellaneous expenses, 540. 30. Served as a disc jockey for a charity ball for 1,500. Received 500, with the remainder due on August 9, 2019. 31. Received 3,000 for serving as a disc jockey for a party. 31. Paid 1,400 royalties (music expense) to National Music Clearing for use of various artists' music during July. 31. Withdrew l,250 cash from PS Music for personal use. PS Music's chart of accounts and the balance of accounts as of July 1, 2019 (all normal balances), are as follows: 11 Cash 3,920 12 Accounts receivable 1,000 14 Supplies 170 15 Prepaid insurance 17 Office Equipment 21 Accounts payable 250 23 Unearned Revenue 31 Peyton smith, Drawing 4,000 32 Fees Earned 500 41 Wages Expense 6,200 50 Office Rent Expense 400 51 Equipment Rent Expense 800 52 Utilities Expense 675 53 Supplies Expense 300 54 music Expense 1,590 55 Advertising Expense 500 56 Supplies Expense 180 59 Miscellaneous Expense 415 Instructions 1.Enter the July 1, 2019, account balances in the appropriate balance column of a four-column account. Write Balance in the Item column and place a check mark () in the Posting Reference column. (Hint: Verify the equality of the debit and credit balances in the ledger before proceeding with the next instruction.) 2.Analyze and journalize each transaction in a two-column journal beginning on Page 1, omitting journal entry explanations. 3.Post the journal to the ledger, extending the account balance to the appropriate balance column after each posting. 4.Prepare an unadjusted trial balance as of July 31, 2019.
Problem 2-55A Events and Transactions The accountant for Boatsman Products Inc. received the following information: Boatsman sent its customers a new price list. Prices were increased an average of 3% on all items. Boatsman accepted an offer of 5150.000 for land that it had purchased 2 years ago for 130,000. Cash and the deed for the property are to be exchanged in 5 days. Boatsman accepted $150,000 cash and gave the purchaser the deed for the property described in Item b. Boatmens president purchased 600 shares of the firms common stock from another stock-holder; The president paid $15 per share. The former stockholder had purchased the stock from Boatsman for $4 per share. Boatsman leases its delivery trucks from a local dealer. The dealer also performs maintenance on the trucks for boats man. Boats man received a $1.254 bill for maintenance from the dealer. Required: l. CONCEPTUAL CONNECTION Indicate whether or not each item qualifies as a transaction and should be recorded in the amounting system. Explain your reasoning. 2. CONCEPTUAL CONNECTION What accounting concept is illustrated by Item d?
profile-image Time remaining: 00 : 09 : 42 Accounting Part II : Nick had a general purpose truck (“Old Truck”) that he used in his sole proprietorship. Nick originally acquired the Old Truck in 2018 by paying $23,790 in cash, performing consulting services for the seller worth $5,600, and financing the remainder of the purchase price with a $7,100 loan. During 2021, Nick traded in the Old Truck to a car dealership while purchasing a used general purpose truck (“Used Truck”). Nick and the car dealership are unrelated to each other. As part of the exchange, the dealership gave Nick a trade-in allowance of $8,300 for the Old Truck (i.e., credited $8,300 against the total purchase price for the Used Truck) and assumed the remaining $2,700 outstanding balance of his liability (i.e., the unpaid balance of the $7,100 loan that Nick took out when he acquired the Old Truck in 2018). Nick properly took $28,083 of depreciation on the Old Truck. Finally, Nick had to pay the government a $45 fee to…
Please don't provide answer in image format thank you Hi guys, I need help with these question. Thank you so much On January 1, 2022, Sam and Sara formed a new business entity called Nice Brother Co. Sam contributes $250,000 cash and Sara contributes land with an adjusted basis of $300,000 and fair market value of $492,000 with a mortgage of $258,000 that is assumed by Nice Brother Co. Assume the following operating results for 2022: Sales $ 1,500,000 Interest income – from a bank $ 3,200 Royalties $ 60,000 Loss from sale of investment $ (7,000) Cost of goods sold $ 622,000 Salaries $ 450,000 Rent $ 144,000 Maintenance $ 24,000 Utilities $ 58,000 EPA penalty $ 1,000 Depreciation ? Charitable contribution $ 30,000 Payment to Sam for retirement* $ 15,000 *payment considered a guaranteed payment if the entity is a partnership The company’s only depreciable asset is equipment (useful life of 5 years) which will be purchased in 2022 for $100,000. The only…
PLEASE SHOW SOLUTIONS IN GOOD ACCOUNTING FORM. 6. On January 01, 2020 Kit Company, Inc. establishes a branch in Bauang. During the year, Kit Inc. transfers cash and merchandise to the branch worth P15,000 and P45,000 respectively. Freight was paid by the home office worth P1,500 included in the cost of merchandise. The home office also incurred P5,700 expenses of which 30 percent was allocated to the branch. On December 31, 2020, the branch incurred a loss of P4,000. What is the balance of the branch account as per home office books?
Date , Trasaction On January 2020 1 Dodong invest P200,000 in the business worth 50,000 2 purchase barber equipment worth 50,000 from PEWDIEPIE enterprises 4 bought furniture for barber shop from D'COP furniture ,P 84,000 on account 6 Dodong withdrew P 15,000 for personal use 7 paid D'COP furniture in full 8 Received the electricity bill worth P60,000 from Name 10 Paid salaries for the barber worth P20,000 12 Rendered barber service for cash P 50,000 14 Paid electricity bill P 60,000 15 Bought new Razors for 15,000 from MANG KANOR enterprises 16 purchased additional furniture from mang kanor worth P6,000 signed a note promising to pay in january 18 17 received water bill for the month worth P1,500 18 paid the purchased furniture from mang kanor worthh P6,000 20 rendered service to mang pacquiao and crew for cash worth P 10,000 21 acquired new air condition from FANatics enterprises worth P20,000 24 paid the…
QUESTION 1 Dana runs a recruitment agency from a freehold property which he had converted to office accommodation when he bought it four years ago. Dana's trial balance for the year to 31st December 2019 was as follows: Trial Balance Dr (£) Cr (£) Cars at cost 56,000 Accumulated depreciation of cars as at 1st January 2019 25,040 Freehold building at cost 215,000 Accumulated depreciation of freehold building as at 1st January 2019 43,000 Debtors 100,000 Bank / cash 20,714 Creditors 68,840 Provision for doubtful debts as at 1st January 2019 6,000 Long term loan (at 10% per annum) 100,000 Capital as at 1st January 2019 118,340 Drawings 8,314 Fee income 152,332 Administrative expenses 21,544 Loan interest (all relating to long term loan)…
Transactions for the month of December 2020 are as follows: 1-Dec Rey Millora opened an account with Union Bank under Rey's Laundromat business name in the amount of P1,500,000. He also invested in a computer worth P100,000 with a fair market value of P90,000. 2 Paid municipal taxes of P5,500 including his license to operate. 5 Bought a P900,000 condominium for his office paying a P500,000 down payment and signing a mortgage with Metro Bank payable in 10 years for the balance. 7 Bought furniture on credit from Furniture World, P45,000. 8 Returned P7,000 worth of furniture bought due to wrong specifications. 9 Bought cash register P24,000 paid in cash. 10 Paid furniture and fixtures purchased account. 11 Bought P5,600 office supplies paid in cash. 12 Bought a P600,000 van from Jade Motors for use in the business. Terms: 25% cash, 40% thru a 30-day, 10% note, and the balance on the account. 13 Made an additional investment of P500,000 and equipment worth P60,000 with…
Transactions for the month of December 2020 are as follows: 1-Dec Rey Millora opened an account with Union Bank under Rey's Laundromat business name in the amount of P1,500,000. He also invested in a computer worth P100,000 with a fair market value of P90,000. 2 Paid municipal taxes of P5,500 including his license to operate. 5 Bought a P900,000 condominium for his office paying a P500,000 down payment and signing a mortgage with Metro Bank payable in 10 years for the balance. 7 Bought furniture on credit from Furniture World, P45,000. 8 Returned P7,000 worth of furniture bought due to wrong specifications. 9 Bought cash register P24,000 paid in cash. 10 Paid furniture and fixtures purchased on account. 11 Bought P5,600 office supplies paid in cash. 12 Bought a P600,000 van from Jade Motors for use in the business. Terms: 25% cash, 40% thru a 30-day, 10% note, and the balance on the…

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