Answer:
C) report $5,000 of hobby income and deduct nothing from AGI since Juanita does not itemize deductions.
Explanation:
After the passage of the Tax Cuts and Jobs Act (HR 1, “TCJA”) from the period 2018 to 2025 the hobbies deduction is no longer valid.
Thus Juanita cannot declare any deduction. As hobbies aren't businesses. They aim for fun and entertainment not profit is not entitled to the tax deduction businesses are.
Answer: A) Income Summary
Explanation:
The Income Summary account is used to compile temporary accounts before posting them to capital accounts. Revenues, Expenses and Cost of Goods are temporary accounts which will be compiled in the Income summary account.
The Income summary account has a debit and a credit side with income going on the credit side and expenses going on the debit side. If the credit side is higher than the debit side then profits have been made. The reverse is true.
Explanation:
Challenge 1: Changes in how buyers buy.
Challenge 2: Competition.
Challenge 3: Need for top talent.
Challenge 4: Competing on price only.
Answer:
a Interest paid to partners based on the amount of invested capital.
Explanation:
A partnership is formed between two parties that agree to go into a venture for mutual gain. The parties share ownership of the business entity and as such are entitled to profit from their equity holdings.
Interest paid based on invested capital is considered a distribution of profit by the business and not an expense. This is similar to sharing profit to shareholders in a company.
Legitimate expenses include: cost of sales, staff cost, administrative costs, advertising costs, and professional expenses like hiring an accountant.
Answer:
Explanation:
The journal entries are shown below:
1. Cash A/c Dr$598
To Sales $560
To Cash over and short $38
(Being the cash sales are recorded and the remaining balance is credited to the cash over and short account)
2. Cash A/c Dr $1,112
Cash over and short A/c Dr $36
To Sales A/c $1,148
(Being the cash sales are recorded and the remaining balance is debited to the cash over and short account)