Hanna operate a cell phone factory and recently the technology used is obsolete leading to closure of business. Hence, she sells all the machinery and receives $2 million dollar. Is the amount received an assessable income?
Q: Michelle operates several food trucks. Indicate the amount (if any) that she can deduct as an…
A: There are certain expenses and losses which are allowed as deduction for the taxation purpose. The…
Q: Jane Shay operates a management consulting business. The business has been successful and now…
A: The tax to be paid as individual is as follows: Resultant table:
Q: his accou
A: (a) Since Richard is a sole proprietor of his business and runs a company in the name of "re-Store…
Q: starts
A: As specified in the question Charles and Stephanie sign a contract for the project which is settled…
Q: Jackie knows that if she didn’t run her own business, she could return to her previous job at a…
A: a) Jackie owns and operates a website design business. In order to break even fixed cost must equal…
Q: ds for the next 3 months. She badly needed P30,000,000 in cash because of an emergency. Pielago…
A: Money Market Fund Money market fund is also called short term financial fund which can be generate…
Q: Alisha, who is single, owns a sole proprietorship in which she works as a management consultant. She…
A: (A) Purchased at Year 1 for $400,000 (B) Depreciation allowance for 3 years: $10000 x 3 = $30000 (C)…
Q: Gavin Green operates a shop situated on a sharp bend in the road. During the income year a truck…
A: Capital expenses are incurred to increase the condition of a property which in turn helps to…
Q: Marie had a good year. She received the following prizes and awards: - an iPad from The Famous…
A: SOLUTION- THE AWARD FROM HER JOB EXCLUDED PLAQUE WORTH $25 PLUS $100 OF GODIVA CHOCOLATE IN…
Q: Shanice owns a food delivery business. She picks up meals from restaurants and delivers them to his…
A: In order to determine the accounting profit, all the expenses are required to be deducted from the…
Q: Khanyisile owns a fabric store and offers a curtain-making service to her customers. The industrial…
A: Given, Cost of machine is R 75,000 Interest rate is 15% Term is 3 years.
Q: Harry has just started a business with $500,000 of assets, funded by $300,000 of personal funds and…
A: Setting up the business as a private company, in this case, the return on equity is 100% as all the…
Q: Which of the following is Katie's best option?
A: Case settlement is the situation when one party files court case against another party for the…
Q: Discuss the possible outcomes of this situation considering his assets and the business assets.
A: The possible outcomes of Chino's situation considering his assets and the business assets are…
Q: Josh is an employee of a large Accounting firm in the city earning $120,000 per year. On weekends,…
A: Definition: Income is the earnings of the individual or business entity by conducting the business…
Q: Phil Dunphy, a real estate agent, is considering whether he should list an unusual $755,485 house…
A: GIVEN, COMMISSION ON SALE= $20,636 probability of sale = 71% LOSS ON UNABLE TO SALE=$5,573…
Q: The company is worried that his entire potato plantation which is expected to yield $400,000 income…
A: Given details: Expected profit = $400,000 Insurance amount = $300,000 Insurance premium = $30,000
Q: Morgan lives alone and needs to move to start a new job. She drives 400 kilometres closer to her new…
A: Answer:- Moving expenses meaning:- The reasonable costs of moving home goods and personal…
Q: Amanda is a self-employed newspaper columnist who does her work exclusively from a home office.…
A: Taxation-Taxation means imposing a tax on individuals and different types of organizations. Which…
Q: Which one of the following actions would be most appropriate to help meet the liquidity needs of…
A: Karen is the sole owner of a wildly successful small business. She does want to take some action to…
Q: Sahana is the trustee of Gina’s bankrupt estate. Gina owns a boutique business which operates from…
A: Trustee refers to an individual who assumes a fiduciary duty and takes ownership of the assets owned…
Q: Jane operated a restaurant individually. Unfortunately, due to the current situation, he has to sell…
A: Capital gain can be defined as the income earned from the sale of capital assets. The taxation…
Q: Curt is self-employed as a real estate salesman and drives his car frequently to take clients to see…
A: The expenses that can be claimed or allowed in income tax are only up to the use of assets for…
Q: Suhana is the trustee of gina's bankrupt estate. Gina owns a boutique business which operates from…
A: Trustee refers to an individual who assumes a fiduciary duty and takes ownership of the assets owned…
Q: A. Nenita Mendoza, who plans to go abroad, is selling her mini-donut business. Her friend Benita…
A: Net worth of the business means fair market value of assets of the business after deducting all…
Q: Josh is an employee of a large Accounting firm in the city earning $120,000 per year. On weekends,…
A: As per the IRS, passive activity losses can be set off against other passive activities and even…
Q: Helen invested $5,000 on a new computer for her company. She uses the computer for business 35…
A: In computation of income for calculation of incomes taxes, the amount of expenses which can be…
Q: Gino is a computer programmer who earned $ 45,000 in 2019. But on January 1, 2020 he opened a…
A: Economic profit is the profit which is earned by the company when all the explicit as well as…
Q: Lileth Adriano, who plans to go abroad, is selling her mini-donut business. Her friend, Benita…
A: The net worth of an business depends on the assets and liabilities the firm is having at a…
Q: Cindy operates a computerized engineering drawing business from her home. Cindy maintains a home…
A: Definition: Expenses: Amount spent for running day to day business activities are called expenses.
Q: Henri quit his job as a teacher earning AUD 70,000 per year to start his own food kiosk business. To…
A: Economic profit The calculation of economic profit is some what difference in the calculation of…
Q: Jessica is a professional consultant. She agrees to consulting services for Joe for $2,000. After…
A: This question deals with the IFRS 15 " Revenue from contracts with customer". As per IFRS 15, When…
Q: Energo Electronics, an incorporated business, has a highly paid electrical and computer specialist,…
A: The level plus account value death benefit means, when the insured person die, his beneficiary…
Q: Phil Dunphy, a real estate agent, is considering whether he should list an unusual $393,668 house…
A: Here, Sale Price of House is $393,668 Expenses are $4,295 Commission on sale is $16,068 Probability…
Q: Rich Uncle is getting on in years and no longer can safely navigate the stairs in his beautiful…
A: Medical Expenses Deduction It was the allowable deduction for the medical expenses which incurred…
Q: A reputable doctor quits his job, which pays $77,000 a year, to open a non-governmental organization…
A: Lets understand the basics. Opportunity cost is a potential loss due to acceptance of any other…
Q: Suppose that Joe had a long term lease which requires him to pay the rent even if he doesn't operate…
A: ANSWER : Lets calculate the income joe currently earns per annum : Particulars Amount Net…
Q: Which one of the following would not be included in Doug's gross income? C Doug's employer pays $100…
A: Gross income: It refers to the income that is received by an individual before providing for any…
Q: Ricardo is an engineer in a private company and earned salaries of $ 103,000 a year. During the…
A: As per IRS gross income is the income in all ways like salary , bonus ,…
Q: Amy is a business owner who purchased a policy of business insurance providing 1,000,000 limits for…
A: Insurance is actually a protection which purchased by the person in order to safeguard from the loss…
Q: Phil Dunphy, a real estate agent, is considering whether he should list an unusual $516,464 house…
A: Here we have to use probability method to calculate profit.
Q: Joy, a sole proprietor involved in AirBnB, needs to sell almost all of his apartments. The selling…
A: Introduction Depreciated replacement cost refers to the current replacement cost after…
Q: oe quits his computer programming job, where he was earning a salary of $60,000 per year, to start…
A: Accounting Cost: It is the recorded cost of any financial activity. It is recorded in the ledger of…
Q: Lileth Adriano, who plans to go abroad, is selling her mini-donut business. Her friend, Benita…
A: Buying of the other business means to purchase a running business from the owner of the business who…
Q: ingh operates a shuttle business and has a fleet of 4 cars. One of his cars was badly damaged in an…
A: Assessable income refers to the income on which the business or person pays the tax, when the person…
Q: Jane is a roofing contractor. Jane's friend needed a new roof but did not have the cash to pay.…
A: Lets understand the basics. When goods or services performed in exchange of asset then gross income…
Hanna operate a cell phone factory and recently the technology used is obsolete leading to closure of business. Hence, she sells all the machinery and receives $2 million dollar. Is the amount received an assessable income?
Step by step
Solved in 2 steps
- Annie develops a successful tax practice. She sells the practice to her friend Carol for $54,000 and moves to Florida to retire. The tax practice has no assets except intangible benefits such as the goodwill and going-concern value Annie has developed over the years. How should Carol treat the $54,000 cost of the tax practice she has purchased?Joanne is in the 24% tax bracket and owns depreciable business equipment that she purchased several years ago for 135,000. She has taken 100,000 of depreciation on the equipment, and it is worth 55,000. Joannes niece, Susan, is starting a new business and is short of cash. Susan has asked Joanne to gift the equipment to her so that Susan can use it in her business. Joanne no longer needs the equipment. Identify the alternatives available to Joanne if she wants to help Susan and the tax effects of those alternatives. (Assume that all alternatives involve the business equipment in one way or another, and ignore the gift tax.)Owe ramsin is upgrading her factory equipment this year and sells her old equipment. The old equipment had an original basis of $2,000 but has since been fully depreciated. Ramsin sells the property for $1,500. What are the tax consequences for Ramsin on the sales? 1. $1,500 ordinary income 2. No effect 3. $500 ordinary loss 4. $1,500 capital gain
- Elsie had an AGI of $105,000 in 2018. All of her income was from wages. Elsie owned a rental house and actively participated in the management of the rental house. The rental house generated losses of $25,000 in 2018. Elsie has over $100,000 at risk. What amount of the $25,000 loss can Elsie deduct in 2018?Explain why the loss resulting from the sale of a computer in the following three situations is treated differently for income tax purposes:a. Monica sells her personal computer at a loss of $1,300. None of the loss is deductible.b. Omar sells a computer used in his carpeting business at a loss of $4,300. The loss is fully deductible.c. Jerry sells his computer at a loss of $3,800. Jerry used the computer to keep track of his investment portfolio. Only $3,000 of the loss is deductible.Gino is a computer programmer who earned $ 45,000 in 2019. But on January 1, 2020 he opened a landscaping business. At the end of 2020, Gino submitted the information listed below to his accountant. Use the question facts to calculate Gino's opportunity cost of production and economic profit. Gino stopped renting out his cottage for $ 3,500 a year and used it as his business premises. 1. The market value of the cottage increased from$ 92,000 to$ 98,000 2. 3. He spent $ 30,000 on materials, phone, utilities, etc 4. He leased machines for $ 15,000 a year. 5. He paid $ 15,000 in wages. 6. He used $ 5,000 from his savings account, which earns 5 percent a year interest. 7. He borrowed $ 20,000 at 10 percent a year from the bank. 8. He sold $ 240,000 worth of landscaping. 9. Normal profit is $25,000a year.
- Sidney is a car salesman. As a result of being the best salesman for the year, his employer permits him to buy a new BMW with a cost of Fair Market Value to the dealer of $40,000 for only $25,000. This is to be Sidney's personal vehicle and not used in business. As a result of this purchase, Sydney must report. Zero Income or Loss $40,000 income $15,000 income $20,000 incomeJoy, a sole proprietor involved in AirBnB, needs to sell almost all of his apartments. The selling prices were originally 500,000 on average. Because of circumstances, she had to quickly sell these at 350,000 on average less a 10% commission payable to whoever referred the buyers to her. What is the depreciated replacement value?Joe quits his computer programming job, where he was earning a salary of $60,000 per year, to start his own computer software business in a building that he owns and was previously renting out for $27,000 per year. In his first year of business he has the following expenses: salary paid to himself, $35,000; rent, $0; and other expenses, $25,000. Find the accounting cost and the economic cost associated with Joe's computer software business. (Enter numeric responses using an integer.) The accounting cost of Joe's business is $| -(Enter your response as an integer.)
- I hire Susan to sell my house. I tell her that I'm hoping to get $200,000 for the house. She tells me she needs $2,000 to make repairs on the house before it is listed for sale. I give her the $2,000. She takes my money but never makes the repairs. The house sells for $220,000. If Susan is ordered to pay restitution, she will have to pay $ 2000Ivy Gordon's home in Charleston was recently gutted in a fire. Her living and dining rooms were destroyed completely, and the damaged personal property had a replacement price of $36,000. The average age of the damaged personal property was 5 years, and its useful life was estimated to be 13 years. What is the maximum amount the insurance company would pay Ivy, assuming that it reimburses losses on an actual cash-value basis and has a $500 deductible? Assume that the total coverage requirement is met. Do not round intermediate calculations. Round the answer to the nearest cent.Amy is a business owner who purchased a policy of business insurance providing 1,000,000 limits for 1st party coverages. Covid and inflation has cut into her profits so she chose to purchase an actual cash value 1 party coverage limit as opposed to replacement cost. Unfortunately she had a fire and all of the contents of her office building were destroyed (computers, copying machine, phones etc.) Amy's office contents were quite old and had a value at the time of the fire of $550,000. The cost to replace these items, however, was $975,000. Amy is glad she purchased 1,000,000 limits thinking she will be able to buy new contents to replace the destroyed ones without having to spend any $. After all her limits are less than the cost to replace. Is she correct? Explain.