Individual Income Taxes
43rd Edition
ISBN: 9780357109731
Author: Hoffman
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 18, Problem 1CPA
Paula has sales that qualify to be reported on the installment basis. In year 2, installment sales were $40,000 with a cost of $30,000. In year 3, installment sales were $50,000 with a cost of $25,000. Collections in year 2 were in the amount of $30,000. Collections in year 3 were $10,000 on the year 2 sales and $30,000 on the year 3 sales. How much deferred gross profit exists as of the end of year 2?
- a. $2,500
- b. $5,000
- c. $7,500
- d. $10,000
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Company M uses the cost recovery method. During 19A, it sells goods with a cost of $15,000 for $25,000, payable in installments of $10,000, $10,000 and $5,000, respectively, beginning in 19A. How much profit should be recognized each year?
The following selected transactions apply to Topeca Supply for November and December Year 1. November was the first month of operations. Sales tax is collected at the time of sale but is not paid to the state sales tax agency until the following month.
Cash sales for November Year 1 were $65,000, plus sales tax of 10 percent.
Topeca Supply paid the November sales tax to the state agency on December 10, Year 1.
Cash sales for December Year 1 were $79,500, plus sales tax of 10 percent.
Requireda. Record the preceding transactions in general journal form.b. Show the effect of the preceding transactions on a horizontal statements model like the one shown next.c. What was the total amount of sales tax paid in Year 1?d. What was the total amount of sales tax collected in Year 1?e. What amount of sales tax expense will be reported on the Year 1 income statement?
The following selected transactions apply to Topeca Supply for November and December, Year 1. November was the first month of operations. Sales tax is collected at the time of sale but is not paid to the state sales tax agency until the following month.
Cash sales for November, Year 1 were $64,500 plus sales tax of 9 percent.
Topeca Supply paid the November sales tax to the state agency on December 10, Year 1.
Cash sales for December, Year 1 were $80,000 plus sales tax of 9 percent.
What was the total amount of sales tax collected in Year 1?
What is the amount of the sales tax liability as of December 31, Year 1?
Chapter 18 Solutions
Individual Income Taxes
Ch. 18 - Prob. 1DQCh. 18 - Prob. 2DQCh. 18 - Prob. 3DQCh. 18 - Prob. 4DQCh. 18 - Prob. 5DQCh. 18 - Prob. 6DQCh. 18 - Prob. 7DQCh. 18 - LO.2 In 2019, the taxpayer became ineligible to...Ch. 18 - LO.2 Osprey Corporation, an accrual basis...Ch. 18 - Prob. 10DQ
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