A wholesale business with a December 31 year-end purchased new equipment on November 25, 2021, for $41,000. Before 2021, the business owned no other equipment. Required: a. What are the tax consequences if the business sells the equipment in 2023 for (a) $16,000? (b) $24,000? (c) $47,000? (Use a minus sign (-) when entering numbers that reduce UCC.) 2021 purchase 2021 CCA 2021 UCC 2022 CCA 2022 UCC 2022 UCC Situation A Less disposal Proceeds Interim UCC Balance $ 41,000 0 Ending UCC $ 0 2022 UCC Situation B Less disposal Proceeds Interim UCC Balance $ 0 Ending UCC $ 0 2022 UCC Situation C Less disposal Proceeds Interim UCC Balance $ 0 Ending UCC Capital Gain Taxable Capital gain $ 0
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- Craig's Cars, a car dealership founded in 2020, had taxable income and net operating losses as follows (before any NOL deduction): Tax Year Taxable Income/(NOL) 2020 $90,000 2021 ($50,000) 2022 $60,000 2023 $55,000 What is the amount of Craig's Cars 2022 NOL deduction? Enter as a positive number. Hint: make sure not to confuse the NCL (net capital loss) carryover rules with the NOL (net operating loss) carryover rules.А. Place an "X" in the blank for the following items which you believe should be included in the cost of a piece of equipment? 1. Purchase price 2. Sales tax 3. Electricity to run the equipment 4. Installation cost 5. Insurance while being transported 6. Insurance while in use 7. Freight charges В. Your company signed a contract to construct a new building so you borrowed $600,000 on February 1, 2021 and issued a three-year, 6% note which pays interest annually. You spent $200,000 for construction on April 1, 2021 and an additional $300,000 on November 1. How much interest should be capitalized in 2021? Please show your calculations. С. Your company spent $30,000 for repairs and modifications to significantly increase the life of your equipment. What entry should be made for the $30,000? D. You bought equipment on January 1, 2018, for $62,000. The equipment has an estimated life of 8 years and an estimated salvage value of $6,000. Your company uses the straight- line method of…Michael Inc., a publicly accountable entity, sells specialized equipment on December 31, 2020. The equipment could have been purchased for a cash price of $3,250,000 however, the purchaser opted to sign a note payable with the following terms: - interest payments of $75,000 on December 31, 2021, 2022, 2023 and 2024 and - a final payment of $3,500,000 on December 31, 2024. Required: i) ii) Prepare all journal entries relative to this note for Michael Inc. (the seller) for the years ending December 31, 2020 and 2021. If instead, Michael Inc. is a private company subject to ASPE, prepare the December 31, 2021 journal entry using the more simple method allowed under ASPE.
- Monty Construction Company changed from the cost-recovery to the percentage-of-completion method of accounting for long-term construction contracts during 2026. For tax purposes, the company employs the cost-recovery method and will continue this approach in the future. (Hint. Adjust all tax consequences through the Deferred Tax Liability account.) The appropriate information related to this change is as follows. Pretax Income from Percentage-of-Completion 2025 $822,000 2026 750,000 Cost-Recovery $542,000 497,000 Difference $280,000 253,000QUESTION 1 A) By way of an example , state the difference between an “Exempt supply and a “Zero -rated supply” ? B) A second dealer buys a used fridge from a non-vendor for NAD 600 for resale. He pays the person NAD 400 immediately and the balance of NAD 200 in the next VAT period. Calculate the input tax that the second hand dealer will be entitled to claim ? C) A vendor purchases a VEHICLE for private purposes on 1 March 2020. The VEHICLE costs NAD228 000 including VAT (excludes finance charges and any other charges incurred). The vendor then decides to use the VEHICLE exclusively in his business for delivery of goods to his/her customers with effect from1 March 2020. At the time of introducing the VEHICLE into the business, it had an open market value of NAD205 200. Calculate input VAT to be claimed by the vendor?Isaac Inc. began operations in January 2021. For some property sales, Isaac recognizes income in the period of sale for financial reporting purposes. However, for income tax purposes, Isaac recognizes income when it collects cash from the buyer's installment payments. In 2021, Isaac had $632 million in sales of this type. Scheduled collections for these sales are as follows: 2021 2022 2023 2024 2025 Assume that Isaac has a 25% income tax rate and that there were no other differences in income for financial statement and tax purposes. O $62 million. $ Ignoring operating expenses, what deferred tax liability would Isaac report in its year-end 2021 balance sheet? (Round your answer to the nearest whole million.) O $584 million. 62million 122million 138million 153million 157million $ 632million O $134.5 million. O $143 million.
- LCD Company prepares its accounts to 5 April each year. A S April 2019, the tax wiitten down value on its main pool is E12500. In the year to 5 Apri 2020, LCD Company bought the following assets: 1 june 2019 Machinery E990,000. 12 November 2019 new Van E17.500. 10 February 2020 Car for salesman (old) (CO2 emissions 100g/am) E9.000. LCD Company disposed of plant on 15 December 2019 for E12.000 (original cost E16.000). Calculate the writing down allowance (wDA) for LCD Company for the year ended 5 April 2020. OAE3,060. BE 9.000. CE7.200. O D. E7.500.Dhofar Dairy Company reported profit of OMR 60,000 during year 2019. During 2019 the company purchased laptops costing OMR 4,500 for its employees. The accountant of the company expensed the cost of laptops during 2019. How much is the taxable income as per Oman Tax Law after adjusting the cost of laptops and its depreciation expense? а. OMR 63,000 b. OMR 64,500 С. OMR 57,000 d. OMR 66,000Assume that the Kelso Company operates in an industry for which NOL carryback is allowed. The Kelso Company had the following operating results: O $22,800. Year 2019 2020 2021 25% What is the income tax refund receivable? O $24,300 O $28,800. Income (loss) 54,000 57,000 (72,000) O 23,550. Tax rate 35% 30% Income tax 18,900first year of operations 17,100 0
- FGH Corporation had the following in 2021: Sales P 3.4M; Cost of sales P 1.2M; Admin expense P 0.3M; Selling expenses P .5M; other taxable income from operations P .1M. What is deductible expense if the company uses OSD?* a. 920,000 b. 1,360,000 c. 880,000 d. 800,000 Using the problem above, what is the income tax payable?* a. 330,000 b. 375,000 c. 575,000 d. 525,000Marvel Corporation (a C-corporation) has the following operating profit for 2019 through 2021. Year 2019 2020 2021 Operating profit ($60,000) $30,000 $50,000 Assume the marginal tax rate is flat 21%. (1) Discuss the tax consequences in year 2019, 2020, and 2021, respectively. (2) Why does the tax law allow business taxpayers to carry the net operating loss (NOL)?In 2020, Garner Grocers had taxable income of -$2,000,000. The corporate tax rate is 25%. Assume that the company takes full advantage of the Tax Code's carry-forward provision. In 2021, Garner has taxable income of $1,000,000. What is the amount of taxes the company paid in 2021? O a. $500,000 Ob. $750,000 O c. $1,500,000 O d. $0 O e. $250,000