Question
In: Accounting
Task 3: Amur started his own business in 2015. For the Accounting year ended 31/3/2020, he...
Task 3:
Amur started his own business in 2015. For the Accounting year
ended 31/3/2020, he prepared Profit and Loss Account for his
business. He had other incomes such as rental income, interest
income, dividend income and profit on sale of fixed asset. He
included all these incomes in his Profit and Loss Account. Also, he
has deducted various expenses while calculating Net Profit in the
Profit and loss Account. He is not sure how to calculate the
adjusted trading profit for the purposes of taxation.
Question:
As you are dealing taxation issues in his office, prepare a
report explaining clearly the various expenses, which are
deductible, and which are not deductible and the treatment of
various other incomes included in the Profit and loss account,
while calculating the adjusted trading profit for tax purposes.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Task 3: Amur started his own business in 2015. For the Accounting year ended 31/3/2020, he...
Task 3:
Amur started his own business in 2015. For the Accounting year
ended 31/3/2020, he prepared Profit and Loss Account for his
business. He had other incomes such as rental income, interest
income, dividend income and profit on sale of fixed asset. He
included all these incomes in his Profit and Loss Account. Also, he
has deducted various expenses while calculating Net Profit in the
Profit and loss Account. He is not sure how to calculate the
adjusted trading...
Amur started his own business in 2015. For the Accounting year ended 31/3/2020, he prepared Profit...
Amur started his own business in 2015. For the Accounting year
ended 31/3/2020, he prepared Profit and Loss Account for his
business. He had other incomes such as rental income, interest
income, dividend income and profit on sale of fixed asset. He
included all these incomes in his Profit and Loss Account. Also, he
has deducted various expenses while calculating Net Profit in the
Profit and loss Account. He is not sure how to calculate the
adjusted trading profit for...
3. EASTDALE INDUSTRIES INC. STATEMENT OF INCOME FOR THE YEAR ENDED MARCH 31, 2020 2020 ...
3.
EASTDALE
INDUSTRIES
INC.
STATEMENT OF
INCOME
FOR THE YEAR ENDED
MARCH 31, 2020
2020
2019
Sales
revenue$1,095,000$750,000
Cost of goods
sold 635,100 435,000
Gross profit 459,900 315,000
Expenses
Depreciation
29,520
24,000
Office
supplies
2,200
1,600
Salaries and
benefits
112,850 102,500
Rent
18,000
18,000
Utilities
27,192
20,200
189,762166,300
Operating
income
270,138 148,700
Income tax
expense
59,430
32,714
Net income$
210,708$
115,986
Additional
information:
Unit sales for 2020
and 2019 were 8,760 and 6,000 units, respectively.
Required:
5a)
For each cost in
the above income statement,...
"Business Expenditures and Deductions" Avery has always wanted to own his own business. Last year, he...
"Business Expenditures and Deductions" Avery has always wanted
to own his own business. Last year, he took the leap and opened a
pet store in a nearby city. He leases the store. He incurred
start-up costs and large inventory costs for buying food in bulk.
He had to purchase three large tables and a machine that moves the
food to higher shelves for storage. He even hired five people: a
groomer, two clerks, a stock person, and a bookkeeper.
Unfortunately,...
For the year ended Dec 31, 2020, King Inc. reported pretax accounting income of $800,000. Select...
For the year ended Dec 31, 2020, King Inc. reported pretax
accounting income of $800,000. Select information is listed
below:
In 2020, the company started issuing stock options to its
employees. The compensation expense related to stock options was
$80,000. The compensation expense related to stock options is not
deductible for tax purpose until the employees exercise the options
in the future.
2) In 2020, the company purchased a piece of equipment with a
cost of $500,000. For financial reporting...
For the year ended Dec 31, 2020, King Inc. reported pretax accounting income of $800,000. Select...
For the year ended Dec 31, 2020, King Inc. reported pretax
accounting income of $800,000.
Select information is listed below:
1) In 2019, the company purchased a piece of equipment with a
cost of $500,000. For financial reporting purposes, the company
used the straight-line method over a 5-year service life with no
residual value expected. For tax purposes, the equipment was
scheduled to be depreciated by $160,000, $140,000, $120,000,
$50,000 and $30,000 in years 2019 through 2023, respectively.
2) During...
3. EASTDALE INDUSTRIES INC. STATEMENT OF INCOME FOR THE YEAR ENDED MARCH 31, 2020 &nbs
3.
EASTDALE INDUSTRIES INC.
STATEMENT OF INCOME
FOR THE YEAR ENDED MARCH 31, 2020
2020
2019
Sales
revenue
$1,095,000
$750,000
Cost of goods
sold
635,100
435,000
Gross
profit
459,900
315,000
Expenses
Depreciation
29,520
24,000
Office supplies
2,200
1,600
Salaries and
benefits
112,850
102,500
Rent
18,000
18,000
Utilities
27,192
20,200
189,762
166,300
Operating
income
270,138
148,700
Income...
3. EASTDALE INDUSTRIES INC. STATEMENT OF INCOME FOR THE YEAR ENDED MARCH 31, 2020 &nbs
3.
EASTDALE INDUSTRIES INC.
STATEMENT OF INCOME
FOR THE YEAR ENDED MARCH 31, 2020
2020 2019
Sales
revenue $1,095,000 $750,000
Cost of goods
sold 635,100 435,000
Gross
profit 459,900 315,000
Expenses
Depreciation 29,520 24,000
Office
supplies 2,200 1,600
Salaries and
benefits 112,850 102,500
Rent 18,000 18,000
Utilities 27,192 20,200
189,762 166,300
Operating
income 270,138 148,700
Income tax
expense 59,430 32,714
Net
income $ 210,708 $
115,986
Additional information:
Unit sales for 2020 and 2019 were 8,760 and 6,000 units,
respectively.
Required:
5 a)
For each cost in the above income statement, identify whether the
cost is fixed, variable and mixed with respect to sales volume, and...
Q7. Mr. Q started his own business. As it is a very small business with little...
Q7. Mr. Q started his own business.
As it is a very small business with little investment and very less
transactions, he does not want to hire any employees to record the
transactions happening in the business. As he is not from an
Accounting background, he finds it very difficult to understand how
to classify the transactions and record. Some transactions are
given to you to help him classify transactions category under A)
Current Assets B) Current Liabilities C) Long...
Tom O'Neal always wanted to own his own business. When he was in high school, he...
Tom O'Neal always wanted to own his own business. When he was in
high school, he worked evenings and most weekends at a neighborhood
bicycle shop. When Tom went to college at the nearby State
University, he still came home in the summers and worked at the
bike shop. Upon graduation from college, with his accounting degree
in hand, the sole proprietor (Steven Judson) of the bike shop
invited Tom to become a full partner in the bike shop. Steven...
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