Interview Notes
1. Jeff may need to make a shared responsibility payment. True/False
2. Linda does not need to make a shared responsibility payment because she qualifies for an exemption under the short coverage gap criteria.True/False
Interview Notes
3. Ava cannot claim her son for the earned income credit because he did not live with her for more than half the year and does not meet the residency test.
A. True, David only lived with his mother during the summer, which was less than six months.
B. False, attendance at school is considered a temporary absence and this time is counted as time that her child lived with her.
Interview Notes
4. David is Ava’s qualifying person for which of the following? (Select all that apply)
A. Head of Household filing status
B. Credit for other dependents
C. Education credit
D. Child tax credit
Interview Notes
5. What is the amount of Ellen's standard deduction?
A. $24,000
B. $19,600
C. $18,000
D. $12,000
6. The maximum amount of additional child tax credit that Ellen is able to claim per qualifying child is:
A. $500
B. $1,000
C. $1,400
D. $2,000
Interview Notes
7. Can Christopher and Amanda claim Jennifer as a qualifying child for the earned income credit (EIC)?
A. Yes, because their income is below the threshold for claiming EIC.
B. Yes, because Jennifer is 3 years old and lives with her parents.
C. No, because Christopher and Amanda both have ITINs.
D. Both A and B.
8. Which credits can Christopher and Amanda claim on their tax return?
A. Child and dependent care credit
B. Child tax credit
C. Credit for other dependents
D. Both A and B
Interview Notes
9. Which of the following statements is true?
A. Both Ashley and Mathew's filing status is Single.
B. Ashley is eligible to claim Head of Household and Mathew must file Single.
C. Ashley's filing status is Married Filing Separately and Mathew's filing status is Single.
D. Ashley's filing status is Married Filing Separately and Mathew's filing status is Head of Household.
10. Who can claim Mark and Kevin as qualifying children for earned income credit?
A. Ashley
B. Mathew
C. Both Mathew and Ashley
Interview Notes
11. What actions should George and Helen take to prevent having a balance due next year?
A. They should use the withholding calculator.
B. They should adjust their Form W-4 to increase withholding.
C. There is no way to prevent a balance due.
D. Both A and B.
12. What options do George and Helen have if they are not able to full pay their balance due by the due date of the return?
A. Wait to file their return until they have the money to pay the full amount owed.
B. File Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return.
C. Pay as much as they can by the due date of the return and request a payment plan.
D. Both A and C.
13. George and Helen ask if their son Joshua should file a tax return for 2018. How should the volunteer respond?A. Joshua is exempt from filing because he is a student.
B. Joshua does not have to file because he is their dependent and they can claim his income on their tax return.
C. Joshua must file based on the 2018 filing threshold for children and other dependents.
D. Joshua should file a tax return to claim a refund of his withholding.
14. What is the amount of gambling winnings claimed on Jacob's and Martha's 2018 tax return?
A. $0
B. $1,300
C. $2,000
D. $2,500
15. Jacob and Martha can claim $2,000 of qualified education expenses to calculate Daniel's American opportunity credit.True/False
16. How much of Martha and Jacob's Social Security is taxable?
A. $0
B. $6,851
C. $7,169
D. $26,350
17. The amount of Martha and Jacob's standard deduction is $________.
18. Which of the following items are included in the total payments on Jacob and Martha's tax return?
A. Federal income tax withheld from Forms W-2 and 1099
B. $400 applied from 2017 return
C. Refundable credits
D. All of the above
19. What form must be used to split Jacob and Martha’s refund?
A. Form 8888, Allocation of Refund (Including Savings Bond Purchases)
B. Form 8880, Credit for Qualified Retirement Savings Contributions
C. Form 8862, Information To Claim Earned Income Credit After Disallowance
D. There is no form. A refund can't be split.
20. Does Emily have to pay a shared responsibility payment on her tax return?
A. Yes, she did not have full health coverage for 12 months of the year.
B. No, she can claim a short coverage gap exemption on her tax return.
21. The amount of Emily's education credit claimed on her tax return is $________.
22. Emily's total federal income tax withheld is $________.
23. What is the total credit amount shown on Form 2441, Child and Dependent Care Expenses?
A. $0
B. $600
C. $660
D. $792
24. Emily is eligible to claim the child tax credit on her 2018 tax return.True/False
25. Emily is subject to the 10% additional tax from her 401(k) distribution.True/False
In: Accounting
Alfonso sells a passive activity in the current year for $800,000. His adjusted basis in the activity is $200,000, and he uses the installment method of reporting the gain. The activity has suspended losses of $44,000. Alfonso receives $400,000 in the year of sale.
Enter as a percentage. For example, .35 would be entered as "35". %
a. What is his gross profit ratio on the sale? _________________%
b. His recognized gain for the current year is $. ____________________
c. Alfonso can currently deduct $______________________ of suspended losses.
In: Accounting
Raintree Cosmetic Company sells its products to customers on a
credit basis. An adjusting entry for bad debt expense is recorded
only at December 31, the company’s fiscal year-end. The 2020
balance sheet disclosed the following:
| Current assets: | ||
| Receivables, net of allowance for uncollectible accounts of $44,000 | $ | 502,000 |
During 2021, credit sales were $1,820,000, cash collections from customers $1,900,000, and $53,000 in accounts receivable were written off. In addition, $4,400 was collected from a customer whose account was written off in 2020. An aging of accounts receivable at December 31, 2021, reveals the following:
| Percentage of Year-End | Percent | |||
| Age Group | Receivables in Group | Uncollectible | ||
| 0−60 days | 65 | % | 4 | % |
| 61−90 days | 15 | 10 | ||
| 91−120 days | 15 | 30 | ||
| Over 120 days | 5 | 50 | ||
Required:
1. Prepare summary journal entries to account for
the 2021 write-offs and the collection of the receivable previously
written off.
2. Prepare the year-end adjusting entry for bad
debts according to each of the following situations:
3. For situations (a)−(c) in requirement 2
above, what would be the net amount of accounts receivable reported
in the 2021 balance sheet?
In: Accounting
Assume a product has the following activities and overhead costs:
Production ($40 per labor hour)
Assembly ($25 per labor hour)
Quality Inspection ($100 per inspection)
Also assume that each product requires 5 hours of direct labor hours for production, 4 hours of direct labor hours for assembly, and one inspection for every 10 units produced.
If the company produces 100 units, what is the total overhead cost?
In: Accounting
Second case #1:
CRV Corp manufactures small plastic fittings for plumbing applications. They have accepted a new contract to provide a wide range of custom plastic fittings. To service the contract, CRV purchases a new, highly complex plastic injection molding machine. CRV’s fiscal year coincides with the calendar year. The machine is installed and operational as of July 1, 2015.
CRV provides the following data:
1. Purchase price of machine: $275,000
2. Shipping and installation: $ 45,000
3. Training costs: $ 15,000
4. Useful life: 5 years
5. Estimated salvage: $ 12,500
Required:
1. Prepare a depreciation schedule showing Net Book value (beginning and ending), depreciation expense, and accumulated depreciation for the asset. Hint: pay attention to dates of acquisition and fiscal year.
Prepare one schedule for each method:
a. Straight-line
b. Double-declining balance
Excel Format
| Year | NBV beg | Factor | Depreciation expense | Accumulated depreciation | NBV ending |
2. Qualitative analysis:
CRV Company receives an offer of $159,000 for the machine in December, 2018.
a. What factors should CRV Company consider in determining whether to sell or keep the machine?
b. Evaluate the implication on taxable income under each deprecation method assuming CRV sells the machine at the end of December 2018.
Use $ values to support your support your written narrative.
#2: Inventory valuation:
The operations manager for CRV has asked you to provide a quantitative and qualitative inventory analysis using a sample of purchases as shown below.
The manager has asked for the following:
| Units | Unit cost | Total cost | |||
| Beginning inventory | a | 1,750 | $3.95 | $6,913 | |
| Purchases | b | 2,100 | $3.75 | $7,875 | |
| c | 1,600 | $4.10 | $6,560 | ||
| 850 | $4.20 | $3,570 | |||
| Sales | 4,100 units sold |
1. Calculate the $ ending inventory and $ cost of goods sold using each of the following inventory methods:
a. FIFO
b. LIFO
c. Average cost
2. Which inventory method would you recommend for reporting for income tax purposes to minimize taxable income? Why?
3. The company is operating in an inflationary environment. Which method should the company use to maximize inventory valuation? Why?
4. Looking at the purchasing volume versus demand, what guidance would you offer to the operations manager regarding inventory management and cash flow?
All calculations must be indicated via Excel formulas.
In: Accounting
What process is used estimate revenues and costs of alternative actions availavbe to decision makers? And how does two-stage Activity-Based costing (ABC) assign costs?
In: Accounting
Fuqua Company’s sales budget projects unit sales of part 198Z of 10,300 units in January, 12,600 units in February, and 13,800 units in March. Each unit of part 198Z requires 3 pounds of materials, which cost $4 per pound. Fuqua Company desires its ending raw materials inventory to equal 40% of the next month’s production requirements, and its ending finished goods inventory to equal 20% of the next month’s expected unit sales. These goals were met at December 31, 2019.
(a)
Prepare a production budget for January and February 2020.
|
FUQUA COMPANY |
||||
|
January |
February |
|||
|
Direct Materials PurchasesUnits To Be ProducedTotal Cost of Direct Materials PurchasesTotal Materials RequiredCost Per PoundExpected Unit SalesDirect Material Pounds Per UnitRequired Production UnitsBeginning Finished Goods InventoryDesired Ending Finished Goods InventoryBeginning Direct MaterialsDesired Pounds in Ending Materials InventoryTotal Required UnitsTotal Pounds Needed for Production |
||||
|
AddLess: Direct Material Pounds Per UnitTotal Required UnitsCost Per PoundDesired Pounds in Ending Materials InventoryTotal Materials RequiredUnits To Be ProducedBeginning Direct MaterialsBeginning Finished Goods InventoryDirect Materials PurchasesTotal Cost of Direct Materials PurchasesDesired Ending Finished Goods InventoryRequired Production UnitsTotal Pounds Needed for ProductionExpected Unit Sales |
||||
|
Units To Be ProducedCost Per PoundBeginning Finished Goods InventoryTotal Materials RequiredTotal Required UnitsDirect Materials PurchasesDesired Ending Finished Goods InventoryTotal Cost of Direct Materials PurchasesTotal Pounds Needed for ProductionDirect Material Pounds Per UnitRequired Production UnitsExpected Unit SalesDesired Pounds in Ending Materials InventoryBeginning Direct Materials |
||||
|
AddLess: Total Required UnitsExpected Unit SalesBeginning Direct MaterialsTotal Materials RequiredBeginning Finished Goods InventoryTotal Cost of Direct Materials PurchasesDirect Material Pounds Per UnitUnits To Be ProducedCost Per PoundDesired Pounds in Ending Materials InventoryRequired Production UnitsDirect Materials PurchasesTotal Pounds Needed for ProductionDesired Ending Finished Goods Inventory |
||||
|
Required Production UnitsTotal Pounds Needed for ProductionExpected Unit SalesDesired Ending Finished Goods InventoryDirect Material Pounds Per UnitUnits To Be ProducedBeginning Direct MaterialsBeginning Finished Goods InventoryCost Per PoundTotal Required UnitsDesired Pounds in Ending Materials InventoryTotal Materials RequiredDirect Materials PurchasesTotal Cost of Direct Materials Purchases |
||||
In: Accounting
QUE 1a) Discuss what is tolerance for risks in the investment market.
b) Explain the reasons why stocks are bought in the investment market.
c) Reasons why non- performing companies in the investment market are sold out to performing companies.
In: Accounting
Stacey Company operates a small manufacturing facility as a supplement to its regular service activities. At the beginning of 2021, an asset account for the company showed the following balances:
| Manufacturing equipment | $ | 66,900 | |
| Accumulated depreciation through 2020 | 52,000 | ||
In early January 2021, the following expenditures were incurred for repairs and maintenance:
| Routine maintenance and repairs on the equipment | $ | 860 | |
| Major overhaul of the equipment | 10,600 | ||
The equipment is being depreciated on a straight-line basis over an estimated life of 12 years, with a $4,500 estimated residual value. The company’s fiscal year ends on December 31.
Required:
1. Calculate the depreciation expense for the manufacturing equipment for 2020.
2. Prepare the journal entries to record the two expenditures that occurred during 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
3. Prepare the adjusting entry at December 31, 2021, to record the depreciation of the manufacturing equipment, assuming no change in the estimated life or residual value of the equipment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
4. Indicate the accounts affected and the amount of the effects of the journal entries you prepared for (1) to (3) on the accounting equation. (Enter any decreases to account balances with a minus sign.)
In: Accounting
|
Andretti Company has a single product called a Dak. The company normally produces and sells 120,000 Daks each year at a selling price of $92 per unit. The company’s unit costs at this level of activity follow: |
| Direct materials | $ | 26.50 | |
| Direct labour | 21.00 | ||
| Variable manufacturing overhead | 18.80 | ||
| Fixed manufacturing overhead | 5.00 | $600,000 total | |
| Variable selling expenses | 7.20 | ||
| Fixed selling expenses | 3.50 | $420,000 total | |
| Total cost per unit | $ | 82.00 | |
|
A number of questions relating to the production and sale of Daks follow. Consider each question separately. |
| Required: |
| 1. |
Assume that Andretti Company has sufficient capacity to produce 200,000 Daks every year without any increase in fixed manufacturing overhead costs. The company could increase its sales by 25% above the present 120,000 units each year if it were willing to increase the fixed selling expenses by $37,500. |
| a. | Calculate the incremental net operating income. (Do not round intermediate calculations.) |
| b. | Would the increased fixed expenses be justified? | ||||
|
| 2. |
Assume again that Andretti Company has sufficient capacity to produce 200,000 Daks every year. A customer in a foreign market wants to purchase 40,000 Daks. Import duties on the Daks would be $5.70 per unit, and costs for permits and licences would be $18,000. The only selling costs that would be associated with the order would be $9.20 per unit shipping cost. Compute the per-unit break-even price on this order. (Do not round intermediate calculations. Round your answer to 2 decimal places.) |
| 3. |
The company has 3,000 Daks on hand that have some irregularities and are therefore considered to be seconds. Due to the irregularities, it will be impossible to sell these units at the normal price through regular distribution channels. What unit cost figure is relevant for setting a minimum selling price? (Round your answer to 2 decimal places.) |
| 4. |
Due to a strike in its supplier’s plant, Andretti Company is unable to purchase more material for the production of Daks. The strike is expected to last for two months. Andretti Company has enough materials on hand to continue to operate at 30% of normal levels for the two-month period. As an alternative, Andretti could close its plant down entirely for the two months. If the plant were closed, fixed overhead costs would continue at 60% of their normal level during the two-month period; the fixed selling costs would be reduced by 20% while the plant was closed. What would be the dollar advantage or disadvantage of closing the plant for the two-month period? (Do not round intermediate calculations.) |
| 5. |
An outside manufacturer has offered to produce Daks for Andretti Company and to ship them directly to Andretti’s customers. If Andretti Company accepts this offer, the facilities that it uses to produce Daks would be idle; however, fixed overhead costs would be reduced by 75% of their present level. Since the outside manufacturer would pay all the costs of shipping, the variable selling costs would be only two-thirds of their present amount. Compute the unit cost figure relevant for comparison to whatever quoted price is received from the outside manufacturer. (Do not round intermediate calculations. Round your answer to 2 decimal places.) |
In: Accounting
Create a balance sheet and income statement using the following information: WIth proper financial statement formatting
Any missing information, please fill in.
Total Shareholder Equity
Long Term Debt: 3,650,000
Inventories: 350,000
Income Taxes: 85,000
Total Non-Operating Expenses, Net
Common stock: 100,000
Total Assets
Retained Earnings: 3,000,000
Cost of Goods Sold: 2,000,000
Interest Income: 20,000
Accounts Receivable: 1,500,000
General and Administrative Costs: 1,000,000
Accruals: 800,000
Preferred Stock
Net Earnings
Goodwill & Other Intangibles: 1,800,000
Net Revenue: 4,500,000
Earnings Before Income Taxes
Total Liabilities
Interest Expense: 90,000
Cash: 5,000,000
Total Operating Expenses
Treasuring stock: (3,500,000)
Total Liabilities and Shareholder's Equity
Depreciation and Amortization: 100,000
Net, Property, Plant, and Equipment: 300,000
Operating Profit
Additional Paid-in Capital: 2,000,000
Marketing and Advertising: 1,000,000
Prepaid Expenses: 310,000
Total Current Liabilities
Gross Profit
Accounts Payable: 300,000
total current assets
In: Accounting
Accounting for intangible assets. Discuss relevance versus reliability as they apply to reporting on the intangible assets of the firm.
In: Accounting
Condensed financial data of Coronado Industries
follow.
|
Coronado Industries |
||||||
|---|---|---|---|---|---|---|
|
Assets |
2022 |
2021 |
||||
|
Cash |
$ 105,040 |
$ 62,920 |
||||
|
Accounts receivable |
114,140 |
49,400 |
||||
|
Inventory |
146,250 |
133,705 |
||||
|
Prepaid expenses |
36,920 |
33,800 |
||||
|
Long-term investments |
179,400 |
141,700 |
||||
|
Plant assets |
370,500 |
315,250 |
||||
|
Accumulated depreciation |
(65,000 |
) |
(67,600 |
) |
||
|
Total |
$887,250 |
$669,175 |
||||
|
Liabilities and Stockholders’ Equity |
||||||
|
Accounts payable |
$ 132,600 |
$ 87,490 |
||||
|
Accrued expenses payable |
21,450 |
27,300 |
||||
|
Bonds payable |
143,000 |
189,800 |
||||
|
Common stock |
286,000 |
227,500 |
||||
|
Retained earnings |
304,200 |
137,085 |
||||
|
Total |
$887,250 |
$669,175 |
||||
|
Coronado Industries |
||||
|---|---|---|---|---|
|
Sales revenue |
$504,998 |
|||
|
Less: |
||||
|
Cost of goods sold |
$176,098 |
|||
|
Operating expenses, excluding depreciation |
16,133 |
|||
|
Depreciation expense |
60,450 |
|||
|
Income tax expense |
35,464 |
|||
|
Interest expense |
6,149 |
|||
|
Loss on disposal of plant assets |
9,750 |
304,044 |
||
|
Net income |
$ 200,954 |
|||
Additional information:
| 1. | New plant assets costing $130,000 were purchased for cash during the year. | |
| 2. | Old plant assets having an original cost of $74,750 and accumulated depreciation of $63,050 were sold for $1,950 cash. | |
| 3. | Bonds payable matured and were paid off at face value for cash. | |
| 4. | A cash dividend of $33,839 was declared and paid during the year. |
Prepare a statement of cash flows using the indirect method.
(Show amounts that decrease cash flow with either a -
sign e.g. -15,000 or in parenthesis e.g.
(15,000).)
In: Accounting
Factor Company is planning to add a new product to its line. To
manufacture this product, the company needs to buy a new machine at
a $507,000 cost with an expected four-year life and a $19,000
salvage value. All sales are for cash, and all costs are
out-of-pocket, except for depreciation on the new machine.
Additional information includes the following. (PV of $1, FV of $1,
PVA of $1, and FVA of $1) (Use appropriate factor(s) from
the tables provided.)
| Expected annual sales of new product | $ | 1,980,000 | |
| Expected annual costs of new product | |||
| Direct materials | 495,000 | ||
| Direct labor | 673,000 | ||
| Overhead (excluding straight-line depreciation on new machine) | 336,000 | ||
| Selling and administrative expenses | 173,000 | ||
| Income taxes | 34 | % | |
Required:
1. Compute straight-line depreciation for each
year of this new machine’s life.
2. Determine expected net income and net cash flow
for each year of this machine’s life.
3. Compute this machine’s payback period, assuming
that cash flows occur evenly throughout each year.
4. Compute this machine’s accounting rate of
return, assuming that income is earned evenly throughout each
year.
5. Compute the net present value for this machine
using a discount rate of 6% and assuming that cash flows occur at
each year-end. (Hint: Salvage value is a cash inflow at
the end of the asset’s life.)
In: Accounting
PARTE I: Bonos por pagar
A continuación, se presenta una porción de la tabla de amortización relacionada con la emisión de unos bonos de 20 años de la Empresa Zeroz (NO TIENE QUE COMPLETAR LA TABLA). Los bonos fueron emitidos el 1 de enero del 2004. Los bonos pagan intereses dos veces al año en julio 1 y enero 1. La fecha de vencimiento es el 1 de enero de 2024. Al momento de la emisión, la empresa no incurrió en ningún costo incidental (asuma que los costos de emisión fueron cero). La empresa cierra libros el 31 de diciembre de cada año.
|
Número de Pago |
Fecha |
Efectivo Pagado |
Gasto de Interés |
Amortización |
Valor en los Libros |
|
- |
1/1/04 = emisión |
? |
|||
|
1 |
30/06/04 |
? |
? |
? |
? |
|
. |
. |
. |
. |
. |
. |
|
. |
. |
. |
. |
. |
. |
|
. |
. |
. |
. |
. |
. |
|
39 |
30/06/23 |
? |
? |
9,246 |
? |
|
40 |
31/12/23 |
? |
? |
9,615 |
1,000,000 |
|
TOTALES |
1,200,000 |
1,397,928 |
197,928 |
REQUERIDO: Basándose en la información provista
In: Accounting