Wednesday, January 18, 2017
Tuesday, September 27, 2016
Tuesday, July 21, 2015
Sunday, July 19, 2015
Pamela was an officer in Green Restaurant which subsequently went bankrupt. Pamelastarted a new restaurant and to establish goodwill, paid off the debts of $100,000 of Green Restaurant. She was under no obligation to do so. The $100,000 is
Pamela was an officer in Green Restaurant which subsequently went
bankrupt. Pamelastarted a new restaurant and to establish goodwill, paid
off the debts of $100,000 of Green Restaurant. She was under no
obligation to do so. The $100,000 is:
Answer: capitalized now because the expenses are not ordinary. No future amortization is permitted.
Answer: capitalized now because the expenses are not ordinary. No future amortization is permitted.
Alan, who is a security officer, is shot while on the job. As a result, Alan suffers from a leginjury and must spend most of his time in a wheelchair until his recovery. Alan's physicianrecommends that he install a whirlpool bath in his home for therapy. During the year, Alanmakes the following expenditures:Wheelchair $ 800Whirlpool bath 2,000Maintenance of the whirlpool 250Increased utility bills associated with whirlpool 450Entrance ramp, various home modifications 4,200A professional appraiser tells Alan that the whirlpool has increased the value of his home by $1,000. Alan's deductible medical expenses (before considering limitations based on AGI)will be
Alan, who is a security officer, is shot while on the job. As a result,
Alan suffers from a leginjury and must spend most of his time in a
wheelchair until his recovery. Alan's physicianrecommends that he
install a whirlpool bath in his home for therapy. During the year,
Alanmakes the following expenditures:Wheelchair $ 800Whirlpool bath
2,000Maintenance of the whirlpool 250Increased utility bills associated
with whirlpool 450Entrance ramp, various home modifications 4,200A
professional appraiser tells Alan that the whirlpool has increased the
value of his home by $1,000. Alan's deductible medical expenses (before
considering limitations based on AGI)will be:
Answer: $6,700
Answer: $6,700
In 2011, Charlie filed his 2010 state income tax return and paid taxes of $800. Also in 2011,Charlie's employer withheld state income tax of $750 from Charlie's salary. In 2012, Charliefiled his 2011 state income tax return and paid an additional $600 of state income tax. Howmuch state income tax can Charlie deduct on his 2011 federal income tax return for stateincome tax
In 2011, Charlie filed his 2010 state income tax return and paid taxes
of $800. Also in 2011,Charlie's employer withheld state income tax of
$750 from Charlie's salary. In 2012, Charlie filed his 2011 state income
tax return and paid an additional $600 of state income tax. Howmuch
state income tax can Charlie deduct on his 2011 federal income tax
return for state income tax?
Answer: $1,550
Answer: $1,550
Thursday, May 7, 2015
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Wednesday, April 29, 2015
Distinguish between program services expenses and supporting services expenses. Why is it important that NFPs report expenses for program services separately from those for supporting services?
Distinguish
between program services expenses and supporting services expenses. Why
is it important that NFPs report expenses for program services
separately from those for supporting services?
IRC Sec. 527 includes such organizations as political action committees, political parties and political campaigns. In fact, Sec. 527 organizations are considered tax-exempt under the IRC. Campaign finance laws typically have an impact on Sec. 527 organizations. As a result of such laws, organizations that meet the definition of a political organization are required to notify the IRS that they wish to be considered a Sec. 527 tax-exempt organization. Additionally, Sec. 527 NFPs must periodically complete Form 8872, notifying the IRS of the names and addresses of persons contributing more than $200 to the NFP, and those persons receiving more than $500 from the NFP.
IRC Sec. 527 includes such organizations as political action committees, political parties and political campaigns. In fact, Sec. 527 organizations are considered tax-exempt under the IRC. Campaign finance laws typically have an impact on Sec. 527 organizations. As a result of such laws, organizations that meet the definition of a political organization are required to notify the IRS that they wish to be considered a Sec. 527 tax-exempt organization. Additionally, Sec. 527 NFPs must periodically complete Form 8872, notifying the IRS of the names and addresses of persons contributing more than $200 to the NFP, and those persons receiving more than $500 from the NFP.
Monday, March 2, 2015
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Wednesday, November 5, 2014
Tuesday, October 28, 2014
The Federal bankruptcy act contains several important terms.
The Federal bankruptcy act contains several important terms. One such term is "insider". The term is used in connection with preferences and preferential transfers. Which amoung the following in not an "insider".
Answer: A secured creditor having a security interest in at least 25% or more of the debtor's property.
Explanation: A secured creditor is not an "insider" for the purposes of a preferential transfer.
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Answer: A secured creditor having a security interest in at least 25% or more of the debtor's property.
Explanation: A secured creditor is not an "insider" for the purposes of a preferential transfer.
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One of the elements necessary to establish that a preferential transfer has been made under the Bankruptcy Code by the debtor to a creditor is that the..
One of the elements necessary to establish that a preferential transfer has been made under the Bankruptcy Code by the debtor to a creditor is that the..
Answer: Debtor was insolvent at the time of the transfer.
Explanation: Under the Bankruptcy Act, one of the elements which must be established in proving that a preferential transfer was made is that the debtor was insolvent at the time of the transfer. The Bankruptcy Act presumes that the debtor is insolvent during 90 days prior to the date the petition was filed.
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Answer: Debtor was insolvent at the time of the transfer.
Explanation: Under the Bankruptcy Act, one of the elements which must be established in proving that a preferential transfer was made is that the debtor was insolvent at the time of the transfer. The Bankruptcy Act presumes that the debtor is insolvent during 90 days prior to the date the petition was filed.
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The trustee in bankruptcy of a landlord-debtor under a Chapter 7 liquidation
The trustee in bankruptcy of a landlord-debtor under a Chapter 7 liquidation..
Answer: May assign the leases of the debtor
Explanation: the trustee may assign the leases of the landlord-debtor if such action is considered to be in the best interest of the debtor's estate. The trustee's duty is to acquires as many assets as possible for distribution to the creditors who files claims in the bankruptcy proceeding.
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Answer: May assign the leases of the debtor
Explanation: the trustee may assign the leases of the landlord-debtor if such action is considered to be in the best interest of the debtor's estate. The trustee's duty is to acquires as many assets as possible for distribution to the creditors who files claims in the bankruptcy proceeding.
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Which of the following is an example of an endorsement found on the back of a promissory note that is a special qualified endorsement?
Which of the following is an example of an endorsement found on the back of a promissory note that is a special qualified endorsement?
Answer: Pay to Jenny Eaton without recourse, (signed) Jan Brake.
Explanation: The endorsement is special because it indicates the person, Jenny Eaton, to whom the instrument is negotiated. The endorsement is also qualified using the phrase "without recourse".
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Answer: Pay to Jenny Eaton without recourse, (signed) Jan Brake.
Explanation: The endorsement is special because it indicates the person, Jenny Eaton, to whom the instrument is negotiated. The endorsement is also qualified using the phrase "without recourse".
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Wednesday, October 1, 2014
Monday, September 22, 2014
Exercise 1-13 Basic assumptions and principles
Exercise 1-13 Basic assumptions and principles [LO1-7, 1-8, 1-9]
For
each of the following situations, state whether you agree or disagree
with the financial reporting practice employed, and briefly explain the
reason for your answer.
|
| 1. |
The
controller of the Dumars Corporation increased the carrying value of
land from its original cost of $2 million to its recently appraised
value of $3.5 million.
|
| 2. |
The
president of Vosburgh Industries asked the company controller to charge
miscellaneous expense for the purchase of an automobile to be used
solely for personal use.
|
| 3. |
At
the end of its 2013 fiscal year, Dower, Inc., received an order from a
customer for $45,350. The merchandise will ship early in 2014. Because
the sale was made to a long-time customer, the controller recorded the
sale in 2013.
|
| 4. |
At
the beginning of its 2013 fiscal year, Rossi Imports paid $48,000 for a
two-year lease on warehouse space. Rossi recorded the expenditure as an
asset to be expensed equally over the two-year period of the lease.
|
| 5. |
The Reliable Tire Company included a note in its financial statements that described a pending lawsuit against the company.
|
| 6. |
The
Hughes Corporation, a company whose securities are publicly traded,
prepares monthly, quarterly, and annual financial statements for
internal use but disseminates to external users only the annual
financial statements.
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|
Exercise 1-2 Accrual accounting - Intermediate Accounting Spiceland 7th Edition
Exercise 1-2 Accrual accounting [LO1-2]
Listed below are several transactions that took place during the second two years of operations for RPG Consulting.
|
| Year 2 | Year 3 | |||||
| Amounts billed to customers for services rendered | $ | 430,000 | $ | 530,000 | ||
| Cash collected from credit customers | 340,000 | 480,000 | ||||
| Cash disbursements: | ||||||
| Payment of rent | 88,000 | 0 | ||||
| Salaries paid to employees for services rendered during the year | 148,000 | 168,000 | ||||
| Travel and entertainment | 38,000 | 48,000 | ||||
| Advertising | 19,000 | 43,000 | ||||
In
addition, you learn that the company incurred advertising costs of
$33,000 in year 2, owed the advertising agency $5,800 at the end of year
1, and there were no liabilities at the end of year 3. Also, there were
no anticipated bad debts on receivables, and the rent payment was for a
two-year period, year 2 and year 3.
| ||||||
Sunday, August 17, 2014
Alamos Co. exchanged equipment and $18,000 cash for similar equipment. The book value and the fair value of the old equipment were $82,000 and $90,000, respectively.
Alamos Co. exchanged equipment and $18,000 cash for similar equipment.
The book value and the fair value of the old equipment were $82,000 and
$90,000, respectively.
Assuming that the exchange has commercial substance, Alamos would record a gain/(loss) of:
Assuming that the exchange has commercial substance, Alamos would record a gain/(loss) of:
| $26,000. | |
![]() | $8,000. |
| $(8,000). | |
| $0. |
| Equipment-new (FV of old + $18,000) | 108,000 | |
| Cash | 18,000 | |
| Equipment-old (book value) | 82,000 | |
| Gain ($90,000 – 82,000) | 8,000 |
Thursday, June 12, 2014
Why would a company use the cash basis of accounting?
To my understanding, some organizations may use the cash
basis of accounting when they cannot convert to GAAP due to costs. When filing
their income taxes the organization may use the tax basis of accounting to save
money for that organization. Political campaigns and committees would be an
example of an organization that would use the cash basis of accounting.
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