Question

In: Accounting

Step's Music Lessons Inc. is a calendar-year taxpayer using the accrual method of accounting.

Step's Music Lessons Inc. is a calendar-year taxpayer using the accrual method of accounting. On September 1 of this year, the corporation received $1,800 for a one-year contract beginning on that date to provide 8 lessons. The company provided 5 lessons this year under the contract. How much should the corporation include in income this year with respect to this contract?

A) $900 B) $1,125 C) $1,275 D) $1,800

Solutions

Expert Solution

Correct Answer is B $1,125

Analysis/Reason

Amount received for a one-year contract = $1,800

Number of lessons to be provided = 8

Lessons provided this year = 5

Amount to be include in income this year with respect to this contract=$1,800 * 5/8 = $1,125

Thus Correct Answer is B $1,125

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

Jorgensen High Tech Inc. is a calendar-year, accrual-method taxpayer. At the end of year 1, Jorgensen...
Jorgensen High Tech Inc. is a calendar-year, accrual-method taxpayer. At the end of year 1, Jorgensen accrued and deducted the following bonuses for certain employees for financial accounting purposes. $45,200 for Ken. $33,900 for Jayne. $22,600 for Jill. $11,300 for Justin. How much of the accrued bonuses can Jorgensen deduct in year 1 under the following alternative scenarios? (Leave no answer blank. Enter zero if applicable. A)Jorgensen paid the bonuses to the employees on March 1 of year 2. Deductible...
Jorgensen High Tech Inc. is a calendar-year, accrual-method taxpayer. At the end of year 1, Jorgensen...
Jorgensen High Tech Inc. is a calendar-year, accrual-method taxpayer. At the end of year 1, Jorgensen accrued and deducted the following bonuses for certain employees for financial accounting purposes. $60,400 for Ken. $45,300 for Jayne. $30,200 for Jill. $15,100 for Justin. How much of the accrued bonuses can Jorgensen deduct in year 1 under the following alternative scenarios? b. Jorgensen paid the bonuses to the employees on April 1 of year 2. c. Jorgensen paid the bonuses to employees on...
Guard Inc., a calendar year C-Corporation, and accrual method taxpayer provide the following information to you...
Guard Inc., a calendar year C-Corporation, and accrual method taxpayer provide the following information to you and asks you to prepare a Schedule M-1. Complete the assignment using the actual Schedule M-1 form (for 1120 C-Corporation). Net Income per Book:                           $425,000 Tax Exempt Interest Income:                $260 Federal Income Tax Paid:                      $10,000 Life Insurance Proceeds:                       $100,000 - (received upon death of key employee – the President) Excess Charitable Contribution             $3,000 (paid $20,000, was only able to deduct $17,000 on current year...
Paul Inc, a calendar year C-Corp and accrual method taxpayer, provides the following information and wants...
Paul Inc, a calendar year C-Corp and accrual method taxpayer, provides the following information and wants a Schedule M-1 prepared (state which line each amount should be on on Schedule M-1). Journal entries should also be prepared. Net Income per Book 535,000 Tax Exempt Interest Income 300 Federal Income Tax Paid 12,000 Life Insurance Proceeds 80,000-received upon death of key employee-the President Capital Loss 8,000 MACRS Tax Depreciation 200,000 - depreciation taken on the tax return Book Depreciation 20,000 -...
Timpanogos Inc. is an accrual-method, calendar-year corporation. For 2020 , it reported
Timpanogos Inc. is an accrual-method, calendar-year corporation. For 2020 , it reported financial statement income after taxes of $1,342,000. Timpanogos provided the following information relating to its 2020 activities: Required:a) Reconcile book income to taxable income for Timpanogos Inc. Be sure to start with book income and identify all of the adjustments necessary to arrive at taxable income. b) Identify each book-tax difference as either permanent or temporary. c) Complete Schedule M-1 for Timpanogos. d) Compute Timpanogos Inc.'s tax liability...
Reliable Manufacturing, Inc. is a calendar year, accrual method C Corporation that is the business of...
Reliable Manufacturing, Inc. is a calendar year, accrual method C Corporation that is the business of manufacturing widgets. Its taxable income averages $2,000,000 each year. On June 1, 2010, Reliable Manufacturer purchased a new manufacturing building in Minneapolis for $2,500,00. The land was allocated $500,000 and the building was allocated $2,000,000 of the purchase price. The building will be placed in service immediately upon purchase. Reliable Manufacturer occupied the building from June 1, 2010 through October 29, 2017. Reliable Manufacturer...
Sunshine Company is a calendar year accrual-basis taxpayer and is in its first year of operations....
Sunshine Company is a calendar year accrual-basis taxpayer and is in its first year of operations. Sunshine Company had the following income, expense, and loss items for the current year: Sales $650,000 Corporate dividend (from 5% owned corporation) 60,000 Municipal bond interest 25,000 Long-term capital gain 0 Short-term capital loss (8,000) Cost of goods sold 320,000 Depreciation 65,000 Nondeductible fines 4,000 Advertising 7,000 Utilities 6,000 Rent 5,000 Furthermore, Sunshine’s liabilities (all recourse) increased from $0 on 1/1 to $300,000 on...
Sunshine Company is a calendar year accrual-basis taxpayer and is in its first year of operations....
Sunshine Company is a calendar year accrual-basis taxpayer and is in its first year of operations. Sunshine Company had the following income, expense, and loss items for the current year: Sales $650,000 Corporate dividend (from 5% owned corporation) 60,000 Municipal bond interest 25,000 Long-term capital gain 0 Short-term capital loss (8,000) Cost of goods sold 320,000 Depreciation 65,000 Nondeductible fines 4,000 Advertising 7,000 Utilities 6,000 Rent 5,000 Furthermore, Sunshine’s liabilities (all recourse) increased from $0 on 1/1 to $300,000 on...
Sunshine Company is a calendar year accrual-basis taxpayer and is in its first year of operations....
Sunshine Company is a calendar year accrual-basis taxpayer and is in its first year of operations. Sunshine Company had the following income, expense, and loss items for the current year: Sales $650,000 Corporate dividend (from 5% owned corporation) 60,000 Municipal bond interest 25,000 Long-term capital gain 0 Short-term capital loss (8,000) Cost of goods sold 320,000 Depreciation 65,000 Nondeductible fines 4,000 Advertising 7,000 Utilities 6,000 Rent 5,000 Furthermore, Sunshine’s liabilities (all recourse) increased from $0 on 1/1 to $300,000 on...
Meganol Company is a calendar year accrual-basis taxpayer and is in its first year of operations....
Meganol Company is a calendar year accrual-basis taxpayer and is in its first year of operations. Meganol Company had the following income, expense, and loss items for the current year: Sales $650,000 Corporate dividend (from 5% owned corporation) 60,000 Municipal bond interest 25,000 Long-term capital gain 0 Short-term capital loss (8,000) Cost of goods sold 320,000 Depreciation 65,000 Nondeductible fines 4,000 Advertising 7,000 Utilities 6,000 Rent 5,000 Furthermore, Meganol's liabilities (all recourse) increased from $0 on 1/1 to $300,000 on...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT