During 2020, you receive from your employer: • a $400 gift certificate. • a $600 chair for outstanding customer service. • 4 coffee mugs that cost the employer $20. • an Easter basket of gourmet treats valued at $245. • a cash award of $300 in recognition of 10 years of service with the employer. What is the amount that will be included in your 2020 Net Income (Division B)?
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Question 2 – During 2020, you receive from your employer:
• a $400 gift certificate.
• a $600 chair for outstanding customer service.
• 4 coffee mugs that cost the employer $20.
• an Easter basket of gourmet treats valued at $245.
• a cash award of $300 in recognition of 10 years of service with the employer.
What is the amount that will be included in your 2020 Net Income (Division B)?
A) $800.
B) $1,000.
C) $1,300.
D) $700.
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- You are employed as a sales representative throughout 2020, with a salary of $275,000 plus a commission on all your sales. Your commissions income in 2020 is $55,000. The employer reimburses you for your hotel, meals, and airline costs. Advertising and promotion expenses are your expense as the employer will not provide an allowance or reimbursement for these expenses. You use your own car for work. You receive an allowance for using your own car of $1,500 each month. The ending balance UCC of Class 10 is $16,000 on December 31, 2019.You estimate that for 2020 the total costs associated with driving your car wilIl be: Operating Costs Financing Costs Total $10,600 1,800 $12,400 Other Information 1. Your employment related expenses are: Travel Costs (Hotel And Airline Costs) Travel Costs (Meals) Advertising And Promotion $18,000 8,500 23,000 2. You drive the car a total of 53,000 kilometers during 2020, with 37,000 kilometers of these related to work. 3. You have a group disability…Problem 16-145 Four independent situations are described below. Each involves future deductible amounts and/or future taxable amounts produced by temporary differences reported first on: Income Statement Tax Return Revenue Expense Revenue Expense $21,000 (1.) (2.) (3.) (4.) $21,000 $15, 200 $21,000 $15, 200 $21, 000 $10, 200 Required: For each situation, determine the taxable income assuming pretax accounting income is $100,000. (Amounts to be deducted should be indicated by a minus sign.) 1 2 3 4 Accounting income Temporary differences: Income statement first: Revenue Expense Tax return first: Revenue Expense Taxable incomeSave & Exit Subm Two independent situations are described below. Each involves future deductible amounts and/or future taxable amounts produced by temporary differences: SITUATION Taxable income Amounts at year-end: Future deductible amounts 2. $46,000 $86,000 5,600 10,600 0 5,600 Future taxable amounts Balances at beginning of year, dr (cr): Deferred tax asset, Deferred tax liability $ 1,000 $ 3,180 0 1,000 The enacted tax rate is 30% for both situations. Required: For each situation determine the: SITUATION 2. (a.) Income tax payable currently. (b.) Deferred tax asset - balance at year-end. (c.) Deferred tax asset change dr or (cr) for the year. (d.) Deferred tax liability - balance at year-end. (e.) Deferred tax liability change dr or (cr) for the year. (f.) Income tax expense for the year. Next > 31 of 39FACTS / DATA / GIVEN: . Тахрауer: • Taxable period: Receipts/earnings/balances during the period: Resident citizen 2nd quarter Description Collections for services rendered in 2nd Amount P50,000 quarter Collections for services rendered in 1st 20,000 quarter Collections for services to be rendered in the 3rd quarter Uncollected billings-1st quarter Uncollected billings-2nd quarter 30,000 10,000 15,000 COMPUTE: Taxable income in the 2nd quarter using CASH basis A. 50,000 В. 60,000 О С. 80,000 D. 100,000What amount of current income tax liability should be reported at year end? a. ₱ 1,780,000 b. ₱ 2,280,000 c. ₱ 2,880,000 d. ₱ 2,580,000a. Capital gains Capital losses Year 1 Year 2 Book-tax Difference Year 1 $ 20,000 8,000 Year 2 $ 5,000 0 Favorable or Unfavorable Temporary or PermanentEarnings (loss) Depreciation (assets have a cost of $390,000) CCA Non-deductible expenses Tax rate Taxable income 1. What is the amount of the taxable income or loss in each year? (Negative amounts and deductible amounts should be indicated by a minus sign.) Accounting earnings Permanent difference: Accounting income subject to tax Temporary difference: Taxable income 20X7 20X7 (first year of operations) $99,000 $50,000 $65,000 $19,000 25% 20X8 20X8 $ (168,000) $ 50,000 $ 75,000 $ 19,000 25%10. Payments made for income taxes P760,000 Income tax payable increased by 200,000 Deferred tax liability, Jan. 1 360,000 Deferred tax liability, Dec. 31 470,000 Deferred tax asset, Jan. 1 85,000 Deferred tax asset, Dec. 31 65,000 Income tax expense under accrual basis accounting is a. 1,090,000 b. 960,000 c. 850,000 d. 830,000Definitions The FASB has defined several terms in regard to accounting for income taxes. Below are various code letters (for terms) followed by definitions. 1. The deferred tax consequences of future deductible amounts and operating loss carryforwards 2. A difference between the tax basis of an asset or liability and its reported amount in the financial statements that will result in taxable or deductible amounts in future years when the reported amount of the asset or liability is recovered or settled, respectively 3. Temporary difference that results in taxable amounts in future years when the related asset or liability is recovered or settled, respectively 4. The future effects on income taxes, as measured by the applicable enacted tax rate and provisions of the enacted tax low, resulting from temporary differences and operating loss carryforwards at the end of the current year 5. The change during the year in a corporations deferred tax liabilities and assets 6. The deferred tax consequences of future taxable amounts 7. The portion of o deferred tax asset for which it is more likely than not that a tax benefit will not be realized 8. Temporary difference that results in deductible amounts in future years when the related asset or liability is recovered or settled, respectively 9. The sum of income tax payable and deferred tax expense (or benefit) 10. The amount of income taxes paid or payable (or refundable) for the current year 11. An excess of tax deductible expenses over taxable revenues in a year that may be carried forward to reduce taxable income in a future year 12. The excess of taxable revenues over tax deductible expenses and exemptions for the year 13. Income tax expense divided by income before income taxesFACTS / DATA / GIVEN: Тахраyer: Taxable period: • Receipts/earnings during the period: Resident citizen 2nd quarter Description Collections for services rendered in 2nd Amount P50,000 quarter Collections for services rendered in 1st 20,000 quarter Collections for services to be rendered in the 3rd quarter Uncollected billings in 1st quarter Uncollected billings in 2nd quarter 30,000 10,000 15,000 COMPUTE: Taxable income in the 2nd quarter using ACCRUAL basis A. 80,000 В. 95,000 ОС. 100,000 D. 115,000Chapter 3 Activity – Taxes Individual Income Tax Brackets (2021) Marginal Tax Rate Single, taxable income over: Joint, taxable income over: Head of Household, taxable income over: 10% $0 $0 $0 12% $9,950 $19,900 $14,200 22% $40,525 $81,050 $54,200 24% $86,375 $172,750 $86,350 32% $164,925 $329,850 $164,900 35% $209,425 $418,850 $209,400 37% $523,600 $628,300 $523,600 Standard Deduction Amounts (2021) Filing Status Deduction Amount Single $12,550 Married Filing Jointly $25,100 Head of Household $18,800 Long-term Capital Gains & Qualified Dividends (2021) Tax Rate Single Joint Head of Household 0% Under $40,000 Under $80,800 Under $54,100 15% $40,400 $80,800 $54,100 20% $445,850 $501,600 $473,750 Additional 3.8% Net Investment Income Tax for MAGI over $200,000 / $250,000 / $200,000 Calculate the federal income…Company K operates in a jurisdiction that levies an income tax with the following rate structure: Percentage Rate 7% 10 15 Company K incurs a $29,000 deductible expense. Required: a. Compute the current year tax savings from the deduction assuming that Company K's taxable income before considering the additional deduction is $70,600. Bracket Income from -0- to $75,000 Income from $75,001 to $150,000 Income in excess of $150,000 b. Compute the current year tax savings from the deduction assuming that Company K's taxable income before considering the additional deduction is $174,000. c. Compute the current year tax savings from the deduction assuming that Company K has a $5,250 loss before considering the additional deduction. Required A Complete this question by entering your answers in the tabs below. Tax savings Required B Required C Compute the current year tax savings from the deduction assuming that Company K's taxable income before considering the additional deduction is $174,000.SEE MORE QUESTIONS