Question

In: Accounting

Through November, Cameron has received gross income of $107,500. For December, Cameron is considering whether to...

Through November, Cameron has received gross income of $107,500. For December, Cameron is considering whether to accept one more work engagement for the year. Engagement 1 will generate $9,170 of revenue at a cost to Cameron of $4,650, which is deductible for AGI. In contrast, engagement 2 will generate $7,950 of qualified business income (QBI), which is eligible for the 20 percent QBI deduction. Cameron files as a single taxpayer.



Calculate Cameron’s taxable income assuming he chooses engagement 1 and assuming he chooses engagement 2. Assume he has no itemized deductions.

Through November, Cameron has received gross income of $107,500. For December, Cameron is considering whether to accept one more work engagement for the year. Engagement 1 will generate $9,170 of revenue at a cost to Cameron of $4,650, which is deductible for AGI. In contrast, engagement 2 will generate $7,950 of qualified business income (QBI), which is eligible for the 20 percent QBI deduction. Cameron files as a single taxpayer.



Calculate Cameron’s taxable income assuming he chooses engagement 1 and assuming he chooses engagement 2. Assume he has no itemized deductions.

Through November, Cameron has received gross income of $107,500. For December, Cameron is considering whether to accept one more work engagement for the year. Engagement 1 will generate $9,170 of revenue at a cost to Cameron of $4,650, which is deductible for AGI. In contrast, engagement 2 will generate $7,950 of qualified business income (QBI), which is eligible for the 20 percent QBI deduction. Cameron files as a single taxpayer.



Calculate Cameron’s taxable income assuming he chooses engagement 1 and assuming he chooses engagement 2. Assume he has no itemized deductions.

    

Through November, Cameron has received gross income of $107,500. For December, Cameron is considering whether to accept one more work engagement for the year. Engagement 1 will generate $9,170 of revenue at a cost to Cameron of $4,650, which is deductible for AGI. In contrast, engagement 2 will generate $7,950 of qualified business income (QBI), which is eligible for the 20 percent QBI deduction. Cameron files as a single taxpayer.



Calculate Cameron’s taxable income assuming he chooses engagement 1 and assuming he chooses engagement 2. Assume he has no itemized deductions.

    

Through November, Cameron has received gross income of $107,500. For December, Cameron is considering whether to accept one more work engagement for the year. Engagement 1 will generate $9,170 of revenue at a cost to Cameron of $4,650, which is deductible for AGI. In contrast, engagement 2 will generate $7,950 of qualified business income (QBI), which is eligible for the 20 percent QBI deduction. Cameron files as a single taxpayer.



Calculate Cameron’s taxable income assuming he chooses engagement 1 and assuming he chooses engagement 2. Assume he has no itemized deductions.

Through November, Cameron has received gross income of $107,500. For December, Cameron is considering whether to accept one more work engagement for the year. Engagement 1 will generate $9,170 of revenue at a cost to Cameron of $4,650, which is deductible for AGI. In contrast, engagement 2 will generate $7,950 of qualified business income (QBI), which is eligible for the 20 percent QBI deduction. Cameron files as a single taxpayer.



Calculate Cameron’s taxable income assuming he chooses engagement 1 and assuming he chooses engagement 2. Assume he has no itemized deductions.

    

    

    

Solutions

Expert Solution

Answer:

Note: As per Tax year 2019 limit, answer will be different for different year:

SL.No Description Engagement 1 ($) Engagement 2 ($)
1 Gross Income before new work engagement 107500 107500
2 Income from engagement 9170 7950
3 Less: Additional for AGI deduction (4650) -
4 Adusted Gross Income 112020 115450
5 Greater of itemized or Standard Deduction 12200 12200
6 Deduction for QBI (7950 * 20%) - 1590
Taxable Income 99820 101660

If the tax year is 2018, then taxable income will be (112020-12000) 100020 101860

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

Through November, Tex has received gross income of $67,500. For December, Tex is considering whether to...
Through November, Tex has received gross income of $67,500. For December, Tex is considering whether to accept one more work engagement for the year. Engagement 1 will generate $7,030 of revenue at a cost of $3,850, which is deductible for AGI. In contrast, engagement 2 will generate $7,030 of revenue at a cost of $3,180, which is deductible as an itemized deduction. Tex files as a single taxpayer. a. Calculate Tex's taxable income assuming he chooses engagement 1 and assuming...
Through November, Tex has received gross income of $52,500. For December, Tex is considering whether to...
Through November, Tex has received gross income of $52,500. For December, Tex is considering whether to accept one more work engagement for the year. Engagement 1 will generate $7,450 of revenue at a cost of $3,550, which is deductible for AGI. In contrast, engagement 2 will generate $7,450 of revenue at a cost of $3,900, which is deductible as an itemized deduction. Tex files as a single taxpayer. a. Calculate Tex's taxable income assuming he chooses engagement 1 and assuming...
Prepare an income statement through gross profit for the year ended November 30, 2014.
At the end of Ermler Department Store’s fiscal year on November 30, 2014, these accounts appeared in its adjusted trial balance. Freight-In ………… $ 5,060 Inventory (beginning)…….. 41,300 Purchases………….. 613,000 Purchase Discounts……….. 7,000 Purchase Returns and Allowances… 6,760 Sales Revenue……….. 902,000 Sales Returns and Allowances….. 20,000 Additional facts: 1. Inventory on November 30, 2014, is $36,200. 2. Note that Ermler Department Store uses a periodic system. Instructions Prepare an income statement through gross profit for the year ended November 30,...
Prepare an income statement for the year ended December 31, through the gross profit for Baxter...
Prepare an income statement for the year ended December 31, through the gross profit for Baxter Company using the following information: Baxter Company sold 8,600 units at $145 per unit. Normal production is 9,000 units. (Do not round fixed overhead rate calculation when determining fixed factory overhead volume variance.) Standard: 5 yards per unit at $6.30 per yard Actual yards used: 43,240 yards at $6.25 per yard Standard: 2.00 hours per unit at $15.00 Actual hours worked: 16,950 at $14.90...
Simmons Brick Company had gross sales of $42,000 in November, $56,000 in December, $28,000 in January,...
Simmons Brick Company had gross sales of $42,000 in November, $56,000 in December, $28,000 in January, $320,000 in February and $35,000 in March. The collections department estimates that 35 percent of the customers pay in the month of sale; 55 percent pay the next month; and the remaining 10 percent pay two months after purchase. Assume 90 days in the quarter. . Calculate the days sales outstanding for the first quarter. . Complete an aging schedule for the first quarter....
Determine the effect on gross income in each of the following cases: a. Eloise received $150,000...
Determine the effect on gross income in each of the following cases: a. Eloise received $150,000 in settlement of a sex discrimination case against her former employer. b. Nell received $10,000 for damages to her personal reputation. She also received $40,000 in punitive damages. c. Orange Corporation, an accn1al basis taxpayer, received $50,000 from a lawsuit filed against its auditor who overcharged for services rendered in a previous year. d. Beth received $10,000 in compensatory damages and $30,000 in punitive...
Is the $3,500 of life insurance proceeds received by Lime included in its gross income? Explain.
Lime Finance Company requires its customers to purchase a credit life insurance policy associated with the loans it makes. Lime is the beneficiary of the policy to the extent of the remaining balance on the loan at die time of the customer’s death. In 2017, Lime wrote off as uncollectible a $5,000 account receivable from Wally, which included $1,500 of accrued interest. When Wally died in 2018, the life insurance policy was still in force and Lime received $3,500. 
(Payments received as compensation for physical injuries) Choose one of the exclusions from gross income that...
(Payments received as compensation for physical injuries) Choose one of the exclusions from gross income that we discussed or that is in the book. (Payments received as compensation for physical injuries) Explain why you think Congress excluded this item from gross income, thus exempting it from taxation. Are there any gross income items that you believe should not be included in taxable income? Explain your answer.
In November and December Year 1, a newly organized magazine publisher received $72,000 for 1,000 three-year...
In November and December Year 1, a newly organized magazine publisher received $72,000 for 1,000 three-year subscriptions at $24 per year, starting with the January Year 2 issue. What amount should they report in the Year 1 income statement for subscription revenue if none of the magazines were delivered in Year 1?
Suppose that an investor is considering the purchase of an multifamily housing. The potential gross income...
Suppose that an investor is considering the purchase of an multifamily housing. The potential gross income of the first year of operations has been estimated at $550,000. To value the property, the investor assume the following factors: Rents are estimated to increase by 2.5% per year. 5.5% vacancy loss rate and no other income. The vacancy loss rate will remain constant. Fixed and variable expenses were estimated at $97,000 and $155,000, respectively. These expenses will continue to represent the same...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT