Through November, Cameron has received gross income of $124,500. For December, Cameron isconsidering whether to accept one more work engagement for the year. Engagement 1 willgenerate $8,170 of revenue at a cost to Cameron of $3,450, which is deductible for AGI. Incontrast, engagement 2 will generate $5,900 of qualified business income (QBI), which is eligiblefor the 20 percent QBI deduction. Cameron files as a single taxpayer.Calculate Cameron's taxable income assuming he chooses engagement 1 and assuming hechooses engagement 2. Assume he has no itemized deductions.× Answer is not complete.Description(1) Gross income before new work engagement(2) Income from engagement(3) Additional for AGI deduction(4) Adjusted gross income(6) Deduction for QBITaxable incomeEngagement 1Engagement 2$124,500$124,5008,1705,9003,4500$129,220$130,40012,950 ×12,950 X01,180

Taxable income : Taxable income is the share of an individual's income which is usually taken as a…

Answered: Through November, Cameron has received…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 6P

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During the last five months of the year, Dwana opens a new Internet telecommunications business called Dwan-Com. Dwan-Com bills 50,000 of revenues, but receives only 40,000 cash. Dwan-Com incurs 3,000 of supply expenses, and 41,000 of labor costs. Dwan-Com pays for 2,200 of the supplies and 38,000 of the labor costs in the current year. a. What is Dwan-Coms taxable income if it elects the cash method of accounting? b. What is Dwan-Coms taxable income if it elects the accrual method of accounting? c. What method of accounting do you recommend that Dwan-Com elect?
On January 1, 2019, Kunto, a cash basis taxpayer, pays 46,228 for a 24-month certificate. The certificate is priced to yield 4% (the effective interest rate) with interest compounded annually. No interest is paid until maturity, when Kunto receives 50,000. In your computations: a. Compute Kuntos gross income from the certificate for 2019. b. Compute Kuntos gross income from the certificate for 2020. Round any amounts to the nearest dollar.
Through November, Cameron has received gross income of $127,000. For December, Cameron is considering whether to accept one more work engagement for the year. Engagement 1 will generate $8,820 of revenue at a cost to Cameron of $3,700, which is deductible for AGI. In contrast, engagement 2 will generate $6,400 of qualified business income (QBI), which is eligible for the 20 percent QBI deduction. Cameron files as a single taxpayer, and did not contribute to charity during the year. -calculate Cameron’s taxable income assuming he chooses engagement 1 and assuming he chooses engagement 2. Assume he has no itemized deductions.
Through November, Cameron has received gross income of $131,000. For December, Cameron is considering whether to accept one more work engagement for the year. Engagement 1 will generate $9,860 of revenue at a cost to Cameron of $4,100, which is deductible for AGI. In contrast, engagement 2 will generate $7,200 of qualified business income (QBI), which is eligible for the 20 percent QBI deduction. Cameron files as a single taxpayer. Calculate Cameron's taxable income assuming he chooses engagement 1 and assuming he chooses engagement 2. Assume he has no itemized deductions. Description (1) Gross income before new work engagement (2) Income from engagement (3) Additional for AGI deduction (4) Adjusted gross income (6) Deduction for QBI Taxable income Engagement 1 Engagement 2
Through November, Cameron has received gross income of $80,000. For December, Cameron is considering whether to accept one more work engagement for the year. Engagement 1 will generate $7,760 of revenue at a cost to Cameron of $4,100, which is deductible for AGI. In contrast, engagement 2 will generate $9,250 of qualified business income (QBI), which is eligible for the 20 percent QBI deduction. Cameron files as a single taxpayer. Calculate Cameron's taxable income assuming he chooses engagement 1 and assuming he chooses engagement 2. Assume he has no itemized deductions. Description (1) Gross income before new work engagement (2) Income from engagement (3) Additional for AGI deduction (4) Adjusted gross income (5) Greater of itemized deductions or standard deduction (6) Deduction for QBI Taxable income Engagement 1 Engagement 2
Through November, Cameron has received gross income of $70,000. For December, Cameron is considering whether to accept one more work engagement for the year. Engagement 1 will generate $8,820 of revenue at a cost to Cameron of $3,900, which is deductible for AGI. In contrast, engagement 2 will generate $7,250 of qualified business income (QBI), which is eligible for the 20 percent QBI deduction. Cameron files as a single taxpayer, and he did not contribute to charity during the year. Calculate Cameron's taxable income assuming he chooses engagement 1 and assuming he chooses engagement 2. Assume he has no itemized deductions. Description (1) Gross income before new work engagement (2) Income from engagement (3) Additional for AGI deduction (4) Adjusted gross income (6) Deduction for QBI Taxable income Engagement 1 Engagement 2
Through November, Cameron has received gross income of $120,000. For December, Cameron is considering whether to accept one more work engagement for the year. Engagement 1 will generate $7,000 of revenue at a cost to Cameron of $3,000, which is deductible for AGI. In contrast, engagement 2 will generate $5,000 of qualified business income (QBI), which is eligible for the 20 percent QBI deduction. Cameron files as a single taxpayer. Calculate Cameron’s taxable income assuming he chooses engagement 1 and assuming he chooses engagement 2. Assume he has no itemized deductions. Which engagement minimizes Cameron’s after -tax cash flow? Explain.
33 Through November, Cameron has received gross income of $129,000. For December, Cameron is considering whether to accept one more work engagement for the year. Engagement 1 will generate $9,340 of revenue at a cost to Cameron of $3,900, which is deductible for AGI. In contrast, engagement 2 will generate $6,800 of qualified business income (QBI), which is eligible for the 20 percent QBI deduction. Cameron files as a single taxpayer. Calculate Cameron's taxable income assuming he chooses engagement 1 and assuming he chooses engagement 2. Assume he has no itemized deductions. Description (1) Gross income before new work engagement Engagement 1 Engagement 2 $ 129,000 $ 129,000 (2) Income from engagement 9,340 9,340 (3) Additional for AGI deduction 3,900 3,900 (4) Adjusted gross income $ 134,440 $ 135,800 (5) Greater of itemized deductions or standard deduction (6) Deduction for QBI Taxable income 0 1,360 $ 134,440 $ 134,440
Through November, Cameron has received gross income of $120,000. For December, Cameron is considering whether to accept one more work engagement for the year. Engagement 1 will generate $7,000 of revenue at a cost to Cameron of $3,000, which is deductible for AGI. In contrast, engagement 2 will generate $5,000 of qualified business income (QBI), which is eligible for the 20 percent QBI deduction. Cameron files as a single taxpayer. Calculate Cameron's taxable income assuming he chooses engagement 1 and assuming he chooses engagement 2. Assume he has no itemized deductions. Description Engagement 1 Engagement 2 (1) Gross income before new work engagement $ 120,000 $ 120,000 (2) Income from engagement 7,000 5,000 (3) Additional for AGI deduction (3,000) (4) Adjusted gross income $ 124,000 $ 125,000 (5) Greater of itemized deductions or standard deduction (6) Deduction for QBI (1,000) Taxable income
During the eight-week period following Paycheck Protection Program (PPP) loan funding, the taxpayer is a sole proprietor and his or her business spends $75,000 on payroll costs, making it eligible for up to $100,000 in PPP forgiveness. The extra $25,000 above payroll costs may be allocated across which of the following expenses paid or incurred during the same 8-week period?
33. Through November, Cameron has received gross income of $120,000. For December, Cameron is considering whether to accept one more work engagement for the year. Engagement 1 will generate $7,000 of revenue at a cost to Cameron of $3,000, which is deductible for AGI. In contrast, engagement 2 will generate $5,000 of qualified business income (QBI), which is eligible for the 20 percent QBI deduction. Cameron files as a single taxpayer, and he did not contribute to charity during the year. a) Calculate Cameron's taxable income assuming he chooses engagement 1 and assuming he chooses engagement 2. Assume he has no itemized deductions. b) Which engagement maximizes Cameron's after-tax cash flow? Explain.
Ryan Ltd commenced operations on 1 July 2019 and has one employee: Joe Hirsch. During the year ended 30 June 2021, Joe was paid $1,700 per week (an annual salary of $88,400). His only weekly deductions were $600 for PAYG tax instalments. Joe has an entitlement to four weeks’ annual leave each year and a 17.5% annual leave loading. The annual leave is accumulating and vesting. During the year ended 30 June 2021, Joe took one week of annual leave. The PAYG tax deducted for this week was $700. Joe also has an entitlement to 10 days sick leave each year. The sick leave is non-accumulating and non-vesting. During the year ended 30 June 2021, Joe took three days’ sick leave. Ryan Ltd provides Joe with 13 weeks of long-service leave (LSL) after 10 years of continuous service. The following information in relation to Joe is available for the year ended 30 June 2021: Projected salary when long-service leave vests: $200,000 Years of service to date:…

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