Answer: The fair market value of the free tour to Costa Rica is a taxable income.
Professor Vanessa Lazlo won the free tour in a draw, where a prize is awarded by chance.
Publication 525 of the IRS defines taxable and non taxable income.
The IRS lists winnings from raffles and lotteries under Other income.
It also declares that the fair market value of winnings from raffles and lotteries are winnings from gambling. Hence the fair market values of non cash prizes are taxable and must be included as income.
Answer:
July 1
No Entry
Sep 1
Dr Cash $2,000
Dr Accounts Receivable $400
Dr Cost of goods sold $1,100
Cr Inventory $1,100
Cr Unearned Service Revenue $554
Cr Sales Revenue $1,846
Oct 15
Dr Cash $400
Dr Unearned Service Revenue $554
Cr Service Revenue $554
Cr Accounts Receivable $400
Explanation:
Preparation of the journal entries for Geraths in 2020.
July 1
No Entry
Sep 1
Dr Cash $2,000
Dr Accounts Receivable $400
($2400-$2000)
Dr Cost of goods sold $1,100
Cr Inventory $1,100
Cr Unearned Service Revenue $554
($600/$600+$2000*$2400)
Cr Sales Revenue $1,846
($2,000/$600+$2000*$2400)
Oct 15
Dr Cash $400
($2400-$2000)
Dr Unearned Service Revenue $554
Cr Service Revenue $554
($600/$600+$2000*$2400)
Cr Accounts Receivable $400
($2400-$2000)
Answer:
The correct answer is letter "A": employed.
Explanation:
Employment is the state in which an individual works independently or for someone else and obtains compensation for the duties performed regardless of the number of hours or days by week that person works. Employment could be informal (usually when the employee does not have payroll benefits) or formal (when the company that person works for offers employees wage, health benefits and a specific number of working hours per week).
