Julia's Tax Prep, an accrual-method, calendar-year taxpayer, will be displaying for the first time at atrade show in July 2022. On Dec. 16, 2021, Julia's signed the contract to rent the booth for $5,000and prepaid the $5,000 trade show booth rental expense. The payment isn't due until May 2022,and use of the booth will occur in July 2022.On Dec. 28, 2021, Ed's Equipment repaired some equipment in Julia's office and billed Julia's$4,000. Julia's received the invoice on Dec. 28, 2021 and paid the $4,000 invoice on Jan. 29, 2022.In addition, in Oct. 2021, Julia's Tax Prep prepaid two years' office rent ($1,000/month * 24months = $24,000). The rent covers Oct. 1, 2021 through Sept. 30, 2023.What amount of the above expenses can Julia's Tax Prep deduct in 2021?

Prepaid expenses refer to the form of an asset that is reflected on the balance sheet of the company…

the "rep, an accrual-method, calendar-year taxpayer, will be displaying for in July 2022. On Dec. 16, 2021, Julia's signed the contract to rent the boo the $5,000 trade show booth rental expense. The payment isn't due until the booth will occur in July 2022. 2021, Ed's Equipment repaired some equipment in Julia's office and bille a's received the invoice on Dec. 28, 2021 and paid the $4,000 invoice on_ in Oct. 2021, Julia's Tax Prep prepaid two years' office rent ($1,000/mont 24,000). The rent covers Oct. 1, 2021 through Sept. 30, 2023.

the "rep, an accrual-method, calendar-year taxpayer, will be displaying for in July 2022. On Dec. 16, 2021, Julia's signed the contract to rent the boo the $5,000 trade show booth rental expense. The payment isn't due until the booth will occur in July 2022. 2021, Ed's Equipment repaired some equipment in Julia's office and bille a's received the invoice on Dec. 28, 2021 and paid the $4,000 invoice on_ in Oct. 2021, Julia's Tax Prep prepaid two years' office rent ($1,000/mont 24,000). The rent covers Oct. 1, 2021 through Sept. 30, 2023.

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter4: Gross Income: Concepts And Inclusions

Section: Chapter Questions

Problem 21CE

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Julia’s Tax Prep, an accrual-method, calendar-year taxpayer, will be displaying for the first time at a trade show in July 2022. On Dec. 16, 2021, Julia’s signed the contract to rent the booth for $7,000 and prepaid the $7,000 trade show booth rental expense. The payment isn’t due until May 2022, and use of the booth will occur in July 2022. On Dec. 28, 2021, Ed’s Equipment repaired some equipment in Julia’s office and billed Julia’s $2,000. Julia’s received the invoice on Dec. 28, 2021 and paid the $2,000 invoice on Jan. 29, 2022. In addition, in Nov. 2021, Julia’s Tax Prep paid six months’ office rent ($1,000/month * 6 months = $6,000). The rent covers Nov. 1, 2021 through April 30, 2022. What amount of the above expenses can Julia's Tax Prep deduct in 2021?