Answer:
d. Orange Corporation will be allowed to deduct the interest expense in 2019 and Rodney will be required to report the interest income in 2019.
Explanation:
Since Orange Corporation is an accrual based organisation they cannot deduct the interest expense until Rodney (a cash basis taxpayer) recognises it as an income.
Rodney will recognise the income in January 2019 when he has received payment, and this is when Orange Corporation will ba able to deduct the interest expense.
Answer:
Explanation:
Amount realized on sale:
Cash $75,000
Purchaser’s note 675,000
$750,000
Adjusted basis (535,000)
Gain realized on sale $215,000
b. $215,000 gain realized ÷ $750,000 contract price = 28.67% gross profit percentage.
Cash received in year of sale:
Cash at closing $75,000
August principal payment 33,750
$108,750
Gain recognized (108750*28.67%) $31,179
A. Book gain $215,000
Tax gain (31,179)
Book/tax difference $183,821
B. $183,821 × 35% = $64,338 deferred tax liability
The excess of book gain over tax gain is a favorable difference.
Answer: Option (D) is correct.
Explanation:
From the information given in the question, it was observed that fiscal policy in year 2 is expansionary by comparing it with the fiscal policy in year 1.
The budget deficit in year 1 is $200 billion and in year 2 is $225 billion, so there is an increase in the budget deficit from year 1 to year 2. This means that there is an implementation of expansionary policy either by increasing government spending or decreasing taxes.
On the other hand, standardized deficit also increases from year 1 to year 2, which is also an indication of expansionary fiscal policy.
The each payment is subject to tax $300
<h3>Briefing:-</h3>
$150,000 in total payments ($500 per month for 300 months)
Exclusion ratio equals $60,000 for the annuity's purchase price / $150,000 for all installments, or 40%.
Each payment's taxable component is calculated as follows: $500 X (1-.40 exclusion ratio) = $300
<h3>Which of the following is regarded as the time when an annuity's cumulative value is distributed?</h3>
The accumulation phase, also known as the accumulation period, and the payout phase are the two periods of annuities. Your premiums accrue interest during the accumulation period and increase.
<h3>How is the taxable portion of each annuity payment calculated?</h3>
The exclusion ratio refers to the process used to calculate the taxable share of each payment. Each payment is subject to an exclusion ratio, which specifies that a portion of each payment shall be deemed a return of the owner's cost basis and shall not be subject to tax. But the remaining amount is taxed.
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By employing such an organizational structure, Century Motors most likely set up a <u>Matrix Organization. </u>
A Matrix organization:
- Incorporates people from multiple departments and functions
- Will see people answering to multiple managers of those various departments
- Usually disband after a project is done
The actions of Century Motors are in line with a Matrix Organization in that people from multiple functions were incorporated into the team and the team will disband when the project is done.
We can therefore conclude that this is a matrix organization.
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