Gabriela and Johnny are married and filed a joint tax return. They had the following items for 2018:
| Salary | $103,000 |
| Loss in sale of § 1244 small business stock acquired 3 years ago | (110,000) |
| Stock acquired 2 years ago became worthless during the year | (10,000) |
| Long-term capital gain | 75,000 |
| Non-business bad debt | (9000) |
Gabriela's car was completely destroyed in a hurricane, which had been declared a federal disaster area. At the time of the hurricane, the car had a fair market value of $30,000 and an adjusted basis of $40,000. She used the car 100% of the time for personal use. She received an insurance recovery of $25,000.
1. Provide a detailed calculation of the couple's AGI.
Your Answer must:
(a) explain the rule for § 1244 small business stock and how it applies to the facts;
(b) show a detailed netting capital item;
(c) explains the rule for worthless stock;
(d) explains the rule for the tax treatment of nonbusiness bad debts.
2.(a) What is the rule for calculating the amount of the casualty loss?
(b) Apply the rule to the facts and show a detailed calculation of the loss.
(c) Which schedule does the casualty loss total appear on?
In: Accounting
Gabriela and Johnny are married and filed a joint tax return. They had the following items for 2018:
| Salary | $103,000 |
| Loss in sale of § 1244 small business stock acquired 3 years ago | (110,000) |
| Stock acquired 2 years ago became worthless during the year | (10,000) |
| Long-term capital gain | 75,000 |
| Non-business bad debt | (9000) |
Gabriela's car was completely destroyed in a hurricane, which had been declared a federal disaster area. At the time of the hurricane, the car had a fair market value of $30,000 and an adjusted basis of $40,000. She used the car 100% of the time for personal use. She received an insurance recovery of $25,000.
1. Provide a detailed calculation of the couple's AGI.
Your Answer must:
(a) explain the rule for § 1244 small business stock and how it applies to the facts;
(b) show a detailed netting capital item;
(c) explains the rule for worthless stock;
(d) explains the rule for the tax treatment of nonbusiness bad debts.
2.(a) What is the rule for calculating the amount of the casualty loss?
(b) Apply the rule to the facts and show a detailed calculation of the loss.
(c) Which schedule does the casualty loss total appear on?
In: Accounting
Myrna and Geoffrey filed a joint tax return in 2018. Their AGI was $85,000, and itemized deductions were $24,700, which included $7,000 in state income tax and no other state or local taxes. In 2019, they received a $1,800 refund of the state income taxes they paid in 2018. The standard deduction for married filing jointly in 2018 was $24,000. Under the tax benefit rule, what amount of the state income tax refund is included in gross income in 2019?
In: Accounting
In: Accounting
Pharoah Company's equity securities portfolio which is
appropriately included in current assets is as follows:
| December 31, 2018 | ||||||
|---|---|---|---|---|---|---|
| Cost | Fair Value | Unrealized Gain (Loss) | ||||
| Catlett Corp. | $180000 | $151000 | $-29000 | |||
| Lyman, Inc. | 173000 | 185000 | 12000 | |||
$353000 | $336000 | $-17000 | ||||
Ignoring income taxes, what amount should be reported as a charge
against income in Pharoah's 2018 income statement if 2018 is
Pharoah's first year of operation?
In: Accounting
Inventory Errors Haywood Inc. reported the following information for 2018: Beginning inventory $25,000 Ending inventory 53,440 Sales revenue 1,000,000 Cost of goods sold 620,000 A physical count of inventory at the end of the year showed that ending inventory was actually $65,000.
Required: 1. What is the correct cost of goods sold and gross profit for 2018?
Assuming the error was not corrected, what is the effect on the statement of financial position at December 31, 2018?
In: Accounting
In 2018, X Company expects to produce and sell 66,000 units of its only product for $34.73. The following are budgeted variable costs per unit:
| Direct Materials | $5.39 |
| Direct Labor | $5.27 |
| Variable Overhead | $4.31 |
| Variable selling and administrative | $4.32 |
| Total | $19.29 |
Budgeted fixed overhead for 2018 is $187,440, and budgeted fixed selling and administrative expenses are $190,740.
What is X Company's budgeted contribution margin rate for 2018?
In: Accounting
Verizon Communications financial leverage the last 3 years.
Debt to Assets Ratio: 2016= 91% 2017= 83% 2018=80%
Debt to Equity Ratio: 2016=4.68% 2017= 2.64% 2018=1.99%
Interest Coverage Ratio: 2016=5.80% 2017=5.35% 2018= 5.06%
How is Verizon financing it's assets? Discuss how much risk is associated with the bonds issued by the company? How can this risk be measured? Please Explain.
In: Finance
On February 18, 2018, Union Corporation purchased $1,976,000 of
IBM bonds. Union will hold the bonds indefinitely, and may sell
them if their price increases sufficiently. On December 31, 2018,
and December 31, 2019, the market value of the bonds was $1,924,000
and $2,002,000, respectively.
Required:
2. & 3. Prepare the adjusting entry for
December 31, 2018 and 2019. (If no entry is required for a
transaction/event, select "No journal entry required" in the first
account field.)
In: Accounting
On January 1, 2018, Edward Corporation had 29,000 shares of $5 par value common stock and 29,000 shares of 7%, $100 par value convertible preferred stock outstanding. The preferred shares carried a 2-for-1 conversion privilege. On October 1, 2018, all of the preferred shares were converted to common. What number of shares must Edward use in computing basic earnings per share at December 31, 2018?
In: Accounting