Question
In: Accounting
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 12/31 of the current year.
- Assume that Meganol Company is owned by Thomas as a
sole proprietorship. Thomas received $2,400 per month
($28,800 in total) from Meganol Company as an owner’s draw.
Additionally, Thomas took $55,000 out of Meganol Company near the
end of the year as a partial distribution of profits. (11
points)
- Calculate the net business income of Meganol Company/Thomas that would be reported on Schedule C of Thomas Form 1040.
- How much of the $2,400 per month ($28,800 total) and the $55,000 distribution would Thomas include as taxable income on his Form 1040?
- What amount of Thomas's income will be subject to self-employment tax?
- Note that you do not need to complete Schedule C or other forms, but these form will be a useful guide in completing this portion of the assignment.
Solutions
ekkarill92 answered 3 years agoRelated Solutions
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...
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...
Stage Company operates on a calendar-year basis, reporting its results of operations quarterly. For the first...
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Stage reported sales of $244,000 and operating expenses of $184,000
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Marchal Inc., a calendar year, accrual basis taxpayer, made the following state income tax payments during...
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