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lana66690 [7]
3 years ago
12

In the current year, a taxpayer reports the following items: Salary $50,000 Income from partnership A, in which the taxpayer mat

erially participates 20,000 Passive activity loss from partnership B (40,000) During the year, the taxpayer disposed of the interest in partnership B, which had a suspended loss carryover of $10,000 from prior years. What is the taxpayer's adjusted gross income for the current year
Business
2 answers:
ollegr [7]3 years ago
5 0

Answer:

Usually, passive loss cannot be taken without passive gain.

but when that passive activity interest has been sold in that year, the loss in that activity can be taken

Explanation:

Aloiza [94]3 years ago
5 0

Answer:

$20,000

Explanation:

taxpayer's adjusted gross income = salary ($50,000) + income from partnership ($20,000) - passive loss from partnership ($40,000) - previously suspended carryover loss ($10,000) = $20,000

The salary and partnership income increase taxable income. Since the passive losses were attributable to passive activities form the partnership, they will decrease the taxpayer's income (including the carryover loss).

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, a doctor from the local hospital, is a friend of Fran, the owner of a candy store. Every day, Ed spends about five minutes in
just olya [345]

<u>Answer:</u>

<u>- Yes,</u>

<u>- Bilateral, Implied contract which is enforceable.</u>

<u>Explanation</u>:

Note, both parties consented to a contract even though it was an informal setting. Remember, certain gestures were used by Ed to show contract acceptance, There's also valid consideration since the value of the exchange is known; which is a candy bar for $1.

Fran thus understands that Ed will pay for the candy later since he saw the sign, this also makes it a bilateral contract (between two parties only). The contract is also enforceable since it is legal to sell candies.

6 0
3 years ago
E3-27 (book/static) The Home Style Eats has two restaurants that are open 24 hours a day. Fixed costs for the two restaurants to
vazorg [7]

Answer:

Explanation:

1.

Contribution Margin=Sales - variable cost =$8.75-$3.50=$5.25

Contribution Margin Ratio = Contribution Margin / Sales = $5.25/ $8.75=60%

Pre-Tax Net Income=Net Income/(1-tax rate)

$117,600/(1-0.36)=$183,750

Target Revenue =Fixed cost +Target Pre-Tax net Income/Contribution margin Ratio =($430,500+$183,750)/0.6=$1,023,750

2. Number of customers needed to Break Even

Fixed costs/Contribution margin per unit=$430,500/$5.25=82,000 Customers

Number of customers to earn 117,600 = (Fixed costs + 117,600)/5.25 = (430,500+117,600)/5.25 = 104,400

3.  

Sales (170,000*8.75)   1,487,500

Less: Cost of goods sold   (170,000*3.50)  -595,000

Contribution margin  892,500

Less: fixed costs  -430,500

Net Income before tax  462,000

Less: tax rate (462,000*36%)  - 166,320

Net Income after tax   295,680

3 0
2 years ago
A company purchases and uses 40000 gallons of materials for which they paid $3 a gallon. The materials price variance was $90000
iogann1982 [59]

Answer:

the standard price per gallon is $5.25

Explanation:

the computation of the standard price per gallon is given below;

Materials Price Variance = Actual Quantity × (Standard Price - Actual Price)

$90,000 = 40,000 × (Standard Price - $3)

$2.25 = Standard Price - $3

Standard Price = $5.25

Hence, the standard price per gallon is $5.25

The same should be considered

4 0
2 years ago
Accounting profit differs from economic profit because:
Mariana [72]

Answer:

The correct option is D,economic costs are generally higher than accounting costs because economic costs include all opportunity costs, while accounting costs include explicit costs only.

Explanation:

Economic costs are usually higher because economic costs comprises of both implicit and explicit costs whereas accounting profit calculation only consider the explicit costs.

Explicit costs are the costs that require actual cash flows from the business such as the payment of rent,salaries and many more.

However,implicit costs are not real costs in actual term,they are costs of forgone benefits such as the salaries the business owner if he takes employment elsewhere.

6 0
2 years ago
Read 2 more answers
The following data relate to the accounts of Edmiston Company. a. Unpaid salaries and wages at year end amount to $750. b. Edmis
AVprozaik [17]

Answer:

a. Debit  Salaries and wages expense   $750

   Credit Accrued Salaries and wages   $750

Being entries to record accrued salaries and wages

b. Debit Interest receivable $600

   Credit Interest income     $600

Being entries to record interest earned

c. Debit Insurance expense $350

   Credit Prepaid Insurance  $350

Being entries to record insurance expense

d. Debit Service revenue  $900

   Credit Unearned Service revenue  $900

Being entries to record unearned revenue

e. Debit Supplies expense  $1,500

   Credit Supplies account   $1,500

Being entries to record supplies expense

Explanation:

When salaries are incurred but yet to be paid, the expense has to be recorded with a corresponding liability known as accrued expense. When interest is earned but yet to be paid, it has to be recognized as a credit to the income statement and a debit to the balance sheet.

When insurance is paid in advance, the entries required are  

Debit Prepaid Insurance

Credit Cash account

As time elapses and the insurance expires,

Debit Insurance expense

Since payment was for 2 years, period elapsed as at December 31, 2017 is 7 months hence amount of expense

= 7/24 * $1,200

= $350

When a fee is received in advance for a service yet to be rendered, the revenue for such fee is said to be unearned. The entries required are

Debit Cash account and Credit Unearned fees or deferred revenue.

As the service is performed and the revenue is earned, debit Unearned fees and credit revenue.

When Supplies is purchased, Debit supplies and credit Cash/Accounts payable. As Supplies are used up, debit supplies expense (with the amount used) and Credit Supplies account.

Amount of supplies used

= $2500 - $1000

= $1,500

4 0
2 years ago
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