Color Paint Shop, Inc. is an accrual basis taxpayer that paints automobiles. During 2018, the company painted Sam’s car and was to receive $1,000 payment from his insurance company. Sam was not satisfied with the work, however, and the insurance company refused to pay. In December 2018, Color and Sam agreed that Color would receive $800 for the work, subject to final approval by the insurance company. In the past, Color had come to terms with customers only to have the insurance company negotiate an even smaller amount. In May 2019, the insurance company reviewed the claim and paid the $800 to Color. An IRS agent thinks that Color should report $1,000 of income in 2018 and deduct a $200 loss in 2019.

Paul and Libby White (both are age 66) are married and together have AGI of $105,000 in 2018. They have two dependents and file a joint return. During the year, they paid $8,000 for medical insurance, $15,000 in doctor bills and hospital expenses, and $1,000 for prescribed medicine and drugs.

(A) In December 2018, the Whites received an insurance reimbursement of $3,500 for hospitalization expenses. Determine the deduction allowable for medical expenses paid during the year.

(B) Assume instead that the Whites received the $3,500 insurance reimbursement in February 2019. Determine the deduction allowable for medical expenses incurred in 2018.

(C) Assume that the Whites received the $3,500 insurance reimbursement in February 2019. Discuss whether the reimbursement will be included in their gross income for 2019.

Marilyn, age 38, is employed as an architect. For calendar year 2018, she had AGI of $204,000 and paid the following medical expenses:

Medical insurance premiums                                           $ 7,800

Doctor bills for Peter and Esther (Marilyn’s parents)           7,300

Doctor and dentist bills for Marilyn                                   11,100

Prescription medicines for Marilyn                                          750

Nonprescription insulin for Marilyn                                         950

Peter and Esther would qualify as Marilyn’s dependents except that they file a joint return. Marilyn’s medical insurance policy does not cover them. Marilyn filed a claim for reimbursement of $6,000 of her own expenses with her insurance company in December 2018 and received the reimbursement in January 2019. What is Marilyn’s maximum allowable medical expense deduction for 2018?

Tom earned $50,000 as self employed carpenter. He is single, lives alone, and has been purchasing his health insurance through the marketplace as required under the affordable care act. Tom comes in to have his 2018 taxes prepared in January of 2019, and tells you that he heard that the individual mandate has been repealed, and that he cancelled his health insurance coverage in March of 2018, as he is healthy and no longer wished to pay the premium . based on your knowledge of TCJA, what is the month that Tom would no longer pay a penalty for not having health insurance coverage? January 2018 the legislation is retroactive to January 2017 January 2019 January 2020

Little Company borrowed $56,000 from Sockets on January 1, 2018, and signed a three-year, 7% installment note to be paid in three equal payments at the end of each year. The present value of an ordinary annuity of $1 for 3 periods at 7% is 2.62432. Required: 1. Prepare the journal entry on January 1, 2018, for Sockets’ lending the funds. 2. Calculate the amount of one installment payment. 3. Prepare an amortization schedule for the three-year term of the installment note. 4. Prepare the journal entry for Sockets’ first installment payment received on December 31, 2018. 5. Prepare the journal entry for Sockets’ third installment payment received on December 31, 2020.

I need explanations for the calculations

On Jan. 1, 2017, Keeping Cats Clean, Inc., purchased a new machine to make high-end kitty litter boxes. The machine cost $125,000 and has a useful life of 5 years, or 480,000 boxes manufactured. It’s expected to have a residual value of $5,000. Please fill in the blanks in the table below, assuming that 120,000 boxes are manufactured in 2017 and 100,000 boxes are manufactured in 2018. NOTE THAT YOU ARE ASKED FOR THE AMOUNTS FOR 2018, the SECOND year of depreciation.

A bond was issued on 1st April 2014at par for $1000 bearing an interest rate of 8% per annum. The interest is payable at each year end on 31st March. The bond redeemable at the end of 10th year from the date of issue at 10% premium. At present i.e. on 25th March 2018, such bond can be purchased in open market at the price of $1,023. The investor expects a rate of return of !0% per annum. Identify the following: 1. Face Value 2. Issue Price 3. Coupon Rate 4.Coupon Payment 5.Maturity Date 6.Redemption Price 7.Market Value as on 25-03-2018 8.Intrinsic Value on 31-03-2018

Branch Company, a building materials supplier, has $17,400,000 of notes payable due April 12, 2019. At December 31, 2018, Branch signed an agreement with First Bank to borrow up to $17,400,000 to refinance the notes on a long-term basis. The agreement specified that borrowings would not exceed 75% of the value of the collateral that Branch provided. At the date of issue of the December 31, 2018, financial statements, the value of Branch's collateral was $19,800,000. On its December 31, 2018, balance sheet, Branch should classify the notes as follows:

Multiple Choice

• $4,350,000 long-term and $13,050,000 current liabilities.

• $17,400,000 of long-term liabilities.

• $17,400,000 of current liabilities.

• $14,850,000 long-term and $2,550,000 current liabilities.