Commercial Recording, Inc. is a manufacturer and distributor of mixing consoles for commercial recording studios. Revenue and cost relations are:

TR = $3,000Q - $0.5Q2

MR

TC = $100,000 + $1,500Q + $0.1Q2

MC

1. Calculate output, marginal cost, average cost, price, and profit at the average cost- minimizing activity level.
2. Calculate these values at the profit-maximizing activity level.
3. Compare and discuss your answers to parts A and B.

= TR/ Q=$3,000-$1Q

= TC/ Q = $1,500 + $0.2Q

2

At a minimum your memorandum should include the following:

- One Internal Revenue Code Sections.

- Two court cases (one of the court cases must be a U.S. Court of Appeals case, i.e.,   

    circuit court case). You may use a circuit court case from any circuit since you are not

    being given residence information.

- One Revenue Ruling.

- One other primary authority (do not use another code section or case for this

    requirement).

TAXPAYER INFORMATION

One of your tax clients, Greta Mills, called you this morning with a tax issue. In an exchange qualifying for Section 351 tax-free treatment, Greta received 100 shares of the White Corporation’s stock, plus a right to receive another 25 shares. The right is contingent on the valuation of a patent contributed by Greta. Because the patent is pending, the patent cannot be valued for several months.

Greta would like you to explain what her tax consequences will be when she exercises her right and receives the 25 shares. Specifically, for purposes of Section 351, whether the 25 shares will be considered “boot” and thus taxable to her, or be considered additional nontaxable stock.  

Please research Greta’s question and prepare a Tax Research Memorandum detailing your results.

Which of the following is NOT true about Income Statements?

Question 2 options:

Chesterfield County had the following transactions.

1. A budget is passed for all ongoing activities. Revenue is anticipated to be $888,750 with approved spending of $583,000 and operating transfers out of $246,000.
2. A contract is signed with a construction company to build a new central office building for the government at a cost of $7,400,000 . A budget for this project has previously been recorded.
3. Bonds are sold for $7,400,000 (face value) to finance construction of the new office building.
4. The new building is completed. An invoice for $7,400,000 is received and paid.
5. Previously unrestricted cash of $1,250,000 is set aside to begin paying the bonds issued in (c).
6. A portion of the bonds comes due and $1,250,000 is paid. Of this total, $110,000 represents interest. The interest had not been previously accrued.
7. Citizens' property tax levies are assessed. Total billing for this tax is $845,000. On this date, the assessment is a legally enforceable claim according to the laws of this state. The money to be received is designated for the current period and 90 percent is assumed to be collectible in this period with receipt of an additional 6 percent during subsequent periods but in time to be available to pay current period claims. The remainder is expected to be uncollectible.
8. Cash of $165,000 is received from a toll road. This money is restricted for highway maintenance.
9. The county received investments valued at $335,000 as a donation from a grateful citizen. Income from these investments must be used to beautify local parks.

Prepare the entries first for fund financial statements and then for government-wide financial statements.

Elisa and Clyde operate a retail sports memorabilia shop. For the current year, sales revenue is $55,000 and expenses are as follows:

Elisa and Clyde pay $8,000 in wages to Boyd, a part-time employee. Because this amount is $1,000 below the minimum wage, Boyd threatens to file a complaint with the appropriate Federal agency. Although Elisa and Clyde pay no attention to Boyd's threat, Chelsie (Elisa's mother) gives Boyd a check for $1,000 for the disputed wages. Both Elisa and Clyde ridicule Chelsie for wasting money when they learn what she has done. The retail shop is the only source of income for Elisa and Clyde.

a. Calculate Elisa and Clyde's AGI.
$

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To be deductible, an expense must be incurred for the taxpayer's benefit or arise from the taxpayer's obligation. An individual cannot claim a tax deduction for the payment of the expenses of another individual. There is one exception.

b. Can Chelsie deduct the $1,000 payment on her tax return?

No

The obligation is that of Elisa and Clyde since it is related to their business.

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Correct

c. Assume instead that Chelsie makes a gift of the $1,000 to Elisa and Clyde and they pay the $1,000 to Boyd.

Can Elisa and Clyde deduct the $1,000 as part of the wage expense?

Yes

Can Chelsie (Elisa's mother) deduct the $1,000 payment to Boyd on her tax return?

No

1. What type of account is accounts receivable?

1. Revenue
2. Asset
3. Equity

2. An entry to post a vendor invoice debits Accounts Payable and credits an Expense account

1. True
2. False

3. When and why would it be appropriate to accrue an AP Invoice?

Complete the sentence using one phrase from both column A and column B

When _______________________________________________________ and

________________________________________________________________

Column A                                                            Column B

4. The café has credit card sales of $1,000, and the processing fee payable to the credit card company is 2%. The cash register is linked directly to the credit card company. The cash is received immediately with a deduction taken for the fee.

Match the terms in column A with the appropriate items in column B to complete the journal entry

Revenue Recognition - Percentage of Completion - Project Instructions, Spring 2018

One of your clients is a large regional construction company. The company has many long-term projects in the works. The spreadsheet you are given contains some information about these jobs. Some of the jobs began last year and continue into the current year, so they exist on both tabs. The projects are in various phases of construction; some of which were completed during the current year.

You've been asked by your firm to analyze the data and prepare the following:

1) Complete the revenue recognition process by adding the necessary calculations into the blank columns F-J and L-M on the Current Year and Prior Year tabs and populate the data for all rows. It is expected that you look back at the text for definitions and to remind yourself of the percentage of completion method prior to asking questions.

Current year:

Prior Yr:

What is the net income of the corporation? Income Statement Items ($) Revenues Sales Revenue 500,000 Cost of Goods Sold 20,000 Administration Expenses 20,000 Selling expenses 30,000 Depreciation 15,000 Taxes 15,000 A. $400,000 B. $100,000 C. $450,000 D. $300,000 E. $150,000