Tom West is a land surveyor who operates a small surveying company, performing surveys for both residential and commercial clients. He has a staff of surveyors and engineers who are employed by the firm. For the year ending December 31, 2017, he reported these income and expenses. Using this information, construct an income statement to reflect his net income for 2017.
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- Roger Jones is a doctor who operates a medical practice. Roger employs two employees (a nurse and a receptionist). Another doctor works at the practice as employee on a part-time basis. The business is operated from rented premises. Roger also owns several residential properties which he rents out to tenants. Assume Roger is registered for GST in respect of the above and accounts for GST on an accruals basis. For the quarter ended 30 June 2021, the following transactions were reported in the accounting records maintained by Roger: Receipts (inclusive of GST where appropriate) Fees from patients 220000 $ Rent from tenants 55000 $ Expenses (inclusive of GST where appropriate) Rent for premises used for medical practice 11000 $ Wages for nurse and receptionist 22000 $ Remuneration paid to the part-time doctor 55000 $ Fresh flowers for Roger’s home 660 $ Plumbing repairs to residential premises 1100 $ New light fittings for residential premises (tax invoice not received) 3300 $…arrow_forwardRita owns a sole proprietorship in which she works as a management consultant. She maintains an office in her home (500 square feet) where she meets with clients, prepares bills, and performs other work-related tasks. Her business expenses, other than home office expenses, total $6,060. The following home-related expenses have been allocated to her home office under the actual expense method for calculating home office expenses. Real property taxes Interest on home mortgage Operating expenses of home $ 1,830 5,445 915 1,738 Depreciation Also, assume that, not counting the sole proprietorship, Rita's AGI is $64,600. Rita itemizes deductions, and her itemized deduction for non-home business taxes is less than $10,000 by more than the real property taxes allocated to business use of the home. Assume Rita's consulting business generated $16,150 in gross income. (Leave no answer blank. Enter zero if applicable.) d. Given the original facts, what types and amounts of expenses will she carry…arrow_forwardTigerPaw started business on January 1, 2020. He invested $5,000 in the business. During the year, his revenue was 45,000 and his expenses were 47,555. He withdrew $1,000 for personal expenses. Prepare a statement of owner’s equity. His year ends on December 31, 2020.arrow_forward
- Ryo Kiritani is a hair dresser and earns income by styling hair of well-known people. He initially received and recorded advance payments of Php 50,000, Php 75,000, and Php 125,000 from A, B, and C, respectively during the year 2022. By the end of December, it was determined that 55%, 30%, and 70% work were done for A, B, and C, respectively by Ryo. 5. Assuming A, B, and C are Ryo Kiritani's only customers, how much is his adjusted service income on December 31, 2022? 6. How much is Ryo Kiritani's adjusted unearned revenue on December 31, 2022? 7. How much is A's adjusted prepaid expenses in relation to Ryo's hair styling services on December 31, 2022?arrow_forwardduring 2017, Regina, a sole proprietor, had the following income and expenses from herhome jewelry business. Regina is also employed as an office assistant at a local business. W-2 wages from employer$28,000 Proceeds from jewelry sales15,000 Supplies for jewelry5,000 Travel for jewelry1,400 Charitable contributions to church3,000 a.What income or loss should be reported on Schedule C? b.What is Regina's AGI?arrow_forwardMr. Sojo opened up a merchandising business on October 1 2019 with a cash investment of 50,000. The following activities were given:arrow_forward
- Rita owns a sole proprietorship in which she works as a management consultant. She maintains an office in her home (500 square feet) where she meets with clients, prepares bills, and performs other work-related tasks. Her business expenses, other than home office expenses, total $5,600. The following home-related expenses have been allocated to her home office under the actual expense method for calculating home office expenses. Real property taxes Interest on home mortgage Operating expenses of home Depreciation $ 1,600 5,100 800 1,600 Also, assume that, not counting the sole proprietorship, Rita's AGI is $60,000. Rita itemizes deductions, and her itemized deduction for non-home business taxes is less than $10,000 by more than the real property taxes allocated to business use of the home. Assume Rita's consulting business generated $13,000 in gross income for the current year. Further, assume Rita uses the actual expense method for computing her home office expense deduction. c. What…arrow_forward2. Fauzana owns a business that makes and sells pets clay. During the financial year ended 31 July 2020, she incurred the following items of expenditure. State whether each of the below is Capital Expenditure or Revenue Expenditure. a. Clay for making the pets toys. b. Wages of sales staff Purchase of potters wheel for use in the business C. d. Installation costs for the potters wheel e. Wages of staff operating the potters wheel Redecoration of store room Payment of extra wages to own staff for f. g. fitting the alarm and cctv Payment of architect fees for designing the proposed new shop Purchase of new telephone system for the businessarrow_forwardRhaegar, a farmer, uses the crop-year method in reporting his income from long-term crops. The following data are relevant to his farming operations in 2018: a. 540,000b. 500,000c. 340,000d. 240,000e. Answer not givenarrow_forward
- Hugo Garcia is preparing his balance sheet and income and expense statementfor the year ending December 31, 2020. He is having difficulty classifying six items and sks for your help. Which,if any, of the following transactions are assets, liabilities, income, or expense items?a. Hugo rents a house for $1,350 a month.b. On June 21, 2020 Hugo bought diamond earrings for his wife and charged them using his Visa card. The earringscost $900, but he hasn’t yet received the bill.c. Hugo borrowed $3,500 from his parents last fall, but so far, he has made no payments to them.d. Hugo makes monthly payments of $225 on an installment loan; about half of it is interest, and the balance isrepayment of principal. He has 20 payments left, totaling $4,500.e. Hugo paid $3,800 in taxes during the year and is due a tax refund of $650, which he hasn’t yet received.f. Hugo invested $2,300 in a mutual fund.g. Hugo’s Aunt Lydia gave him a birthday gift of $300.arrow_forwardRita owns a sole proprietorship in which she works as a management consultant. She maintains an office in her home (500 square feet) where she meets with clients, prepares bills, and performs other work-related tasks. Her business expenses, other than home office expenses, total $6,060. The following home-related expenses have been allocated to her home office under the actual expense method for calculating home office expenses. Real property taxes Interest on home mortgage Operating expenses of home Depreciation $ 1,830 5,445 915 1,738 Also, assume that, not counting the sole proprietorship, Rita's AGI is $64,600. Assume Rita's consulting business generated $16,150 in gross income. (Leave no answer blank. Enter zero if applicable.) c. Given the original facts, what is Rita's AGI for the year?arrow_forwardRita owns a sole proprietorship in which she works as a management consultant. She maintains an office in her home (500 square feet) where she meets with clients, prepares bills, and performs other work-related tasks. Her business expenses, other than home office expenses, total $5,720. The following home-related expenses have been allocated to her home office under the actual expense method for calculating home office expenses. Real property taxes $ 1,660 Interest on home mortgage 5,190 Operating expenses of home 830 Depreciation 1,636 Also, assume that, not counting the sole proprietorship, Rita's AGI is $61,200. Rita itemizes deductions, and her itemized deduction for non-home business taxes is less than $10,000 by more than the real property taxes allocated to business use of the home. Assume Rita's consulting business generated $15,300 in gross income. Note: Leave no answer blank. Enter zero if applicable. Required: What is Rita's home office deduction for the current…arrow_forward
- Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT