(Foreign Pension)

Elizabeth Windsor is 59 years old. She is a resident taxpayer with private health insurance. She also received a government pension from the United Kingdom that is taxable in Australia but not in the United Kingdom. Elizabeth is subject to tax as an Australian resident taxpayer but exempt from tax in the United Kingdom.

During the 2017/18 tax year, Elizabeth derived interest and unfranked dividends of $39,000 and also received $25,000 of pension.

Required:

1. Calculate Elizabeth’s taxable income for the 2017/18 tax year.

This is my answer for part a

I need help with part b

b) Calculate Elizabeth’s tax payable or refundable for the 2017/18 tax year.

Q2 Stan Eckhardt, aged 57, received a superannuation lump sum of $310,000 from his superannuation fund upon retirement on 15 April 2018. PAYG tax of $28,170 was withheld from the lump sum. The lump sum comprised entirely of an element taxed in the fund.

Stan also received gross wages of $85,000 up to the date of his retirement.  PAYG tax of $22,110 was withheld from Stan’s wages. Stan has adequate private health insurance.

Required:

a) Calculate Stan’s taxable income for the 2017/18 tax year.

This is the answer for part (a) which I have it right answered Below:

Computation of taxable income for 2017-2018 :

Receipt from Super Annuation fund = $310,000

Receipt from annual wages  = $85,000

Total income for the year 2017-2018= $395,000

Total taxable income for 2017-2018- $ 395,000

Note: In the United States of America Super annuation fund is not tax deductible and hence any receipt from super annuation fund is taxable in the year of receipt.

I only need help with part b

b ) Calculate Stan’s net tax payable or refundable for the 2017/18 tax year.

Daniel, age 38, is single and has the following income and expenses in 2020:

a. Classify the following expenses as either "Deductible for AGI", "Deductible from AGI", or "Not deductible".

What is Daniel's gross income and his AGI?
Gross income: $
AGI: $

b. Should Daniel itemize his deductions from AGI or take the standard deduction?
Because Daniel's total itemized deductions (after any limitations) are $, he would benefit from itemizing his deductions .

Greg Norman is the auditor in charge of the Rogers Pharmaceutical Company audit. In assessing the internal controls for the company, Greg finds that the company bills customers and receives payments at three offices in three separate states using three different and incompatible software systems for tracking payments. Rogers’s terms of sale varies with the customer and varies from 30 days to 90 days. Open invoices are aged based on when they were booked to the receivables, but cash, chargebacks, or rebates are aged based on when they were applied to the account. Thus, a credit could be posted to the customer’s account when it was received, but the related invoice(s) remains open as a receivable and continues to age. Chargebacks are significant and linked to batch of product rather than invoice. Most similar companies have credit limits or credit checks but Rogers’s does not because all wholesalers are board certified M.D.’s, like the company’s founder.

Rogers’s total accounts receivable was $25,276,025.

Rogers’s total accounts receivable past due over 61 days was $17,434,500.

Rogers’s past top-five wholesalers had accounts receivable of $13,457,516.

Rogers’s top-five wholesale customers had $5,428,850 past due over 61 days.

Rogers’s allowance for doubtful accounts of $266,000 did not include any estimates for the top-five wholesale customers because it was management’s belief at the time that the top-five wholesalers did not present a collection risk.

Required:

Based on these control issues and findings, explain some of the most likely sources of misstatement that exist.

Teal Mountain Industries has the following patents on its December 31, 2016, balance sheet.

Patent Item      Initial Cost      Date Acquired      Useful Life at Date Acquired

Patent A             $44,880               3/1/13                              17 years

Patent B             $17,400               7/1/14                              10 years

Patent C             $24,000               9/1/15                                4 years

The following events occurred during the year ended December 31, 2017.

1. Research and development costs of $250,000 were incurred during the year.

2. Patent D was purchased on July 1 for $46,284. This patent has a useful life of 91/2 years.

3. As a result of reduced demands for certain products protected by Patent B, a possible impairment of Patent B’s value may have occurred at December 31, 2017.The controller for Teal Mountain estimates the expected future cash flows from Patent B will be as follows.

Year                    Expected Future Cash Flows

2018                                      $1,900

2019                                      $1,900

2020                                      $1,900

The proper discount rate to be used for these flows is 8%. (Assume that the cash flows occur at the end of the year.)

Compute the total carrying amount of Teal Mountain’ patents on its December 31, 2016, balance sheet. (Round answer to 0 decimal places, e.g. 8,564.) Total carrying amount $ Compute the total carrying amount of Teal Mountain' patents on its December 31, 2017, balance sheet. (Round answer to 0 decimal places, e.g. 8,564.) Total carrying amount $

In 2018, Babcock Industries, a calendar year corporation, acquired a 10% interest in Caraway, Inc. for $65,000. Babcock appropriately used the fair value method to account for the investment.   At the beginning of 2021, Babcock acquired an additional 25% of the outstanding common stock of Caraway for $250,000. The following additional information is available at the date of purchase related to Caraway’s activity for the years 2018-2020:

Cumulative dividends paid by Caraway                                                          $150,000

Cumulative income reported by Caraway $400,000

Cumulative fair value adjustment in Babcock’s balance sheet

At 12/31/20 $ 35,000

Caraway’s balance sheet on the date of the additional purchase is as follows:

Accounts receivable         $100,000                                Mortgage payable                                $200,000

Inventories                             200,000

Building                                   400,000 Stockholders’ equity                          500,000

Total assets                             $700,000 Total liabilities and equity              $700,000

Babcock based its price for the additional 25% investment on the fact that Caraway has developed a patent that Babcock estimates is worth $300,000. The patent will expire in 10 years.

Subsequent to the investment, Caraway reports earnings of $200,000 and pays $90,000 in dividends. In addition, Babcock sells inventories to Caraway that cost $50,000 for a sales price of $80,000. At the end of 2021, 60% of the inventories are still held by Caraway.

Provide all journal entries needed to record each of the following:

-Babcock’s additional investment in Caraway at the beginning of 2021.

-Caraway reports total earnings of $200,000 for 2021

-Babcock adjusts Caraway’s earnings for amortization of the patent

-Babcock adjusts Caraway’s earnings for deferral of gross profit on the intercompany inventory sale

-Caraway pays total dividends of $90,000

Problem 12-7 (Algo) Various transactions related to equity investments: fair value through net income [LO12-5]

The following selected transactions relate to investment activities of Ornamental Insulation Corporation during 2021. The company buys equity securities as noncurrent investments. None of Ornamental’s investments are large enough to exert significant influence on the investee. Ornamental’s fiscal year ends on December 31. No investments were held by Ornamental on December 31, 2020.

Required:
1. Prepare the appropriate journal entry for each transaction or event during 2021, as well as any adjusting entries necessary at year-end.
2. Indicate any amounts that Ornamental Insulation would report in its 2021 income statement, 2021 statement of comprehensive income, and 12/31/2021 balance sheet as a result of these investments. Include totals for net income, comprehensive income, and retained earnings as a result of these investments.

Problem 12-7 (Algo) Various transactions related to equity investments: fair value through net income [LO12-5] The following selected transactions relate to investment activities of Ornamental Insulation Corporation during 2021. The company buys equity securities as noncurrent investments. None of Ornamental’s investments are large enough to exert significant influence on the investee. Ornamental’s fiscal year ends on December 31. No investments were held by Ornamental on December 31, 2020. Mar. 31 Acquired Distribution Transformers Corporation common stock for $520,000. Sep. 1 Acquired $1,080,000 of American Instruments' common stock. Sep. 30 Received a $18,200 dividend on the Distribution Transformers common stock. Oct. 2 Sold the Distribution Transformers common stock for $557,000. Nov. 1 Purchased $1,560,000 of M&D Corporation common stock. Dec. 31 Recorded any necessary adjusting entry(s) relating to the investments. The market prices of the investments are: American Instruments common stock $ 1,018,000 M&D Corporation common stock $ 1,640,000 Required: 1. Prepare the appropriate journal entry for each transaction or event during 2021, as well as any adjusting entries necessary at year-end. 2. Indicate any amounts that Ornamental Insulation would report in its 2021 income statement, 2021 statement of comprehensive income, and 12/31/2021 balance sheet as a result of these investments. Include totals for net income, comprehensive income, and retained earnings as a result of these investments.

5. You ask your recent MBA hire to evaluate the attractiveness of an investment in a piece of computer equipment you've been interested in. He gives you the following report. (Assume that he at least collected all the figures correctly.) The equipment cost $150,000 and will be straight-line depreciated over 5 years. It will replace an existing system -- that would otherwise be used for the five years -- which has been fully depreciated and could be sold for $3,000. It requires the use of software, which the firm has recently purchased for $20,000. The equipment will improve efficiency, which will allow you to cut costs by $60,000/year. The maintenance of the product requires the time of 1/10th of an employee with salary $30,000 and who generates $50,000 of profits to the firm. An additional $5,000 must be reserved for operations. You know that you can sell this product after 5 years for $50,000. Your firm is taxed at 30%. Last year, your firm had a price increase of 15%. You also know that firms who are only in this no-growth business are trading at a P-E multiple of 10. You receive the following analysis with a recommendation against the investment:

                        0          1          2          3          4          5

                        ---        ---        ---        ---        ---        ---

Cost Savings               60        60        60        60        60

Maintenance               -3         -3         -3         -3         -3

Buy Eqpt      -150                                                       50

Sell Old            3

OppCost of

150K at 15%               -22       -22       -22       -22       -22

Depreciation               -20       -20       -20       -20       -20

Software      -20

                        --------------------------------------------------

EBIT          -167          15        15        15        15        65

Taxes                          4.5       4.5       4.5       4.5       19.5

                        --------------------------------------------------

Net CF        -167         11        11        11        11        46  

IRR<0<Required 15% return. Is this analysis correct? If not, where did your MBA go wrong? Redo the analysis to determine whether you should invest in the new equipment.

MBA - Managerial Economics

1. Demand of a product is usually very sensitive to economic variables, such as the prices and consumer income. This responsiveness of demand is elasticity. Compute elasticity in the below scenarios:
   1. Yesterday, the price of envelopes was $3 a box, and Jacky was willing to buy 10 boxes. Today, the price has gone up to $3.75 a box, and Jacky is now willing to buy 8 boxes. Is Jacky's demand for envelopes elastic or inelastic? What is Jacky's elasticity of demand?
   2. Katy advertises to sell cookies for $4 a dozen. She sells 50 dozen, and decides that she can charge more. She raises the price to $6 a dozen and sells 40 dozen. What is the elasticity of demand? Assuming that the elasticity of demand is constant, how many would she sell if the price were $10 a box?

Thanks

Students taking the GMAT were asked about their undergraduate major and pursuit of their MBA as full time or part time student,

If a student taking the GMAT is randomly selected from this distribution find:

1. The probability that their undergraduate major was business.
2. The probability that their undergraduate major was not business.
3. The probability that their undergraduate major was business and they are a part time student.
4. The probability that their undergraduate major was business or they are a part time student.
5. The probability that they are in business given that they are a part time student.
6. The probability that they are a part time student given that they are in business.