Subject: acc Besito Company, a calendar year, cash basis taxpayer, leases lawn and garden equipment. During December, it received the followingcash payments. To what extent does each payment represent current taxable income to Besito?Required:a. $1,352 repayment of a loan from an employee. Besito loaned $1,300 to the employee six months ago, and the employee repaid theloan with interest.b. $1,400 deposit from a customer who rented mechanical equipment. Besito must return the entire deposit when the customerreturns the undamaged equipment.c. $11,600 short-term loan from a local bank, Besito gave the bank a written note to repay the loan in one year at 4 percent interest.d. $592 prepaid rent from the customer described in part (b). The rent is $8 per day for the 74-day period from December 17 throughFebruary 28For all requirements, leave no cells blank- be certain to enter "0" wherever required.a Taxable incomeb Taxable incomeTaxable incomeTaxable incomeAmount

The total amount of money received by the taxpayer from all sources throughout the taxable year is…

Answered: a. $1,352 repayment of a loan from an…

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter3: Income Sources

Section: Chapter Questions

Problem 84P

See similar textbooks

Similar questions

On January 1, 2019, Kunto, a cash basis taxpayer, pays 46,228 for a 24-month certificate. The certificate is priced to yield 4% (the effective interest rate) with interest compounded annually. No interest is paid until maturity, when Kunto receives 50,000. In your computations: a. Compute Kuntos gross income from the certificate for 2019. b. Compute Kuntos gross income from the certificate for 2020. Round any amounts to the nearest dollar.
How do the all events and economic performance requirements apply to the following transactions by an accrual basis taxpayer? a. The company guarantees its products for six months. At the end of 2019, customers had made valid claims for 600,000 that were not paid until 2020. Also, the company estimates that another 400,000 in claims from 2019 sales will be filed and paid in 2020. b. The accrual basis taxpayer reported 200,000 in corporate taxable income for 2019. The state income tax rate was 6%. The corporation paid 7,000 in estimated state income taxes in 2019 and paid 2,000 on 2018 state income taxes when it filed its 2018 state income tax return in March 2019. The company filed its 2019 state income tax return in March 2020 and paid the remaining 5,000 of its 2019 state income tax liability. c. An employee was involved in an accident while making a sales call. The company paid the injured victim 15,000 in 2019 and agreed to pay the victim 15,000 a year for the next nine years.
The Cable TV Co., an accrual basis taxpayer, allows its customers to pay by the month ($10 each month), by the year ($110 per year), or two years in advance ($200). In December this year, the company collected the following amounts applicable to future services: January next year services (monthly contracts) $11,000 January - December next year Services (annual contracts) $44,000 January - December Services for the next two years $16,000 The income from the above that must be reported as gross income for this year is: $55,000. $71,000. $16,000. $27,000. None of the above
During the eight-week period following Paycheck Protection Program (PPP) loan funding, the taxpayer is a sole proprietor and his or her business spends $75,000 on payroll costs, making it eligible for up to $100,000 in PPP forgiveness. The extra $25,000 above payroll costs may be allocated across which of the following expenses paid or incurred during the same 8-week period?
In the previous year, an employee received a $30,000 loan to acquire a house at a 2% interest rate. Canada Revenue Agency's (CRA's) prescribed interest rate at the time the loan was made was 3%. In the current year CRA's prescribed rate was 4%. The employee's tax rate is 40 % . What would be the taxable benefit and the tax paid by the employee in the current year on the loan? Multiple Choice $900 and $600 $600 and $240 $300 and $120 $900 and $360
A rental house (MACRS-GDS 27.5-year property) is placed in service by a calendar-year taxpayer during July for $70,000. Determine the depreciation deduction and resulting book value for each applicable year using MACRS-GDS allowances.
If a property transaction is scheduled to close on May 14. The purchase agreement states that the seller will be responsible for all taxes "through the date of closing, calculate the individual tax responsibility for the buyer if the total tax owed at the end of the year is $5,000. For this problem, assume that we are dealing with a 365-day calendar year. Ⓒ$0.00 $5,000,00 $1,835.61 O $3,164,38
A lessor rents his 3 commercial and 8 residential units for monthly rent of P65,000 and P15,000 per unit, respectively. During the taxable year, his accumulated gross receipts amounted to P3,780,000. Compute the business tax.
Garden Landscapers is a monthly depositor whose 4th quarter FUTA taxes and 4th quarter voluntary deductions are displayed below. Record one journal entry to account for the payment of federal unemployment taxes and one journal entry to account for the payment of the voluntary deductions. Assume that each voluntary deduction is remitted to the respective organization on a quarterly basis, on the last day of the first month after the end of the quarter. All tax payments are made in a timely manner on the payment due date (which, for this quarter, is not impacted by a weekend or holiday). Chart of Accounts Notes: • Enter the transaction date on the first line only (if multiple transactions are required, enter the date on the first line of each transaction). Enter all debits within the transaction prior . See the Chart of Accounts provided for the proper account names to use. • To earn any credit for a given line within the journal entry, the account name must be correct. Partial credit…
LSG Company is a calendar year, cash basis taxpayer. On November 1, 2018, LSG paid $9,450 cash to the janitorial service firm that cleans LSG’s administrative offices and retail stores. How much of this expenditure can LSG deduct in 2018 assuming that the expenditure is a prepayment for 18 months of cleaning services from November 2018 through April 2020?
Big Homes Corporation is an accrual-method calendar-year taxpeyer that manufactures and sells modular homes This yea, for the first time Big Homes was forced to offer a rebate on the purchase of new homes. At year-end, Big Homes had paid $13,300 in rebates and was liable for an additional $8,150 in rebates to buyers. What amount of the rebates, f any, can Big Homes deduct this year? Multiple Choice $13.300 because the $8,150 liatilty s not fied and determinable su.300 because rebates are payment labintes s2s0 vecaute y Hames is an acerue method tapayer Big Hames is not entted to a deduction because rebates are egainst pubic poicy $21450 is amaunt is not matenal, Big Homes expects to continue the prectice of offering rebetes in future years, and Big Homes expecta to pay the accrued rebates before ting its tax return for this year
In 2021, IRS Company reported pretax financial income of $260,000. IRS Company paid rent in advance of $30,000 to Housing Corporation. For book purposes, there is a deferral of $30,000 for the rent paid in advance. For book purposes, the rent expense will be recognized in 2022. The company's tax rate is 35%. 2021 is the company's first year of operations. 1. Compute IRS Company’s taxable income for 2021 2. Prepare IRS Company's journal entry for 2021.

SEE MORE QUESTIONS

Recommended textbooks for you

CONCEPTS IN FED.TAX., 2020-W/ACCESS

Accounting

ISBN:

9780357110362

Author:

Murphy

Publisher:

CENGAGE L

SWFT Comprehensive Volume 2019

Accounting

ISBN:

9780357233306

Author:

Maloney

Publisher:

Cengage

Individual Income Taxes

Accounting

ISBN:

9780357109731

Author:

Hoffman

Publisher:

CENGAGE LEARNING - CONSIGNMENT

CONCEPTS IN FED.TAX., 2020-W/ACCESS

Accounting

ISBN:

9780357110362

Author:

Murphy

Publisher:

CENGAGE L

SWFT Comprehensive Volume 2019

Accounting

ISBN:

9780357233306

Author:

Maloney

Publisher:

Cengage

Individual Income Taxes

Accounting

ISBN:

9780357109731

Author:

Hoffman

Publisher:

CENGAGE LEARNING - CONSIGNMENT

SWFT Comprehensive Vol 2020

Accounting

ISBN:

9780357391723

Author:

Maloney

Publisher:

Cengage

SWFT Individual Income Taxes

Accounting

ISBN:

9780357391365

Author:

YOUNG

Publisher:

Cengage

SEE MORE TEXTBOOKS