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zloy xaker [14]
3 years ago
7

During Year 5, Tedd Co. became involved in a tax dispute with the IRS. At December 31, Year 5, Tedd's tax advisor believed that

an unfavorable outcome was probable. A reasonable estimate of additional taxes was $400,000 but could be as much as $600,000. After the Year 5 financial statements were issued, Tedd received and accepted an IRS settlement offer of $450,000. What amount of accrued liability should Tedd have reported in its December 31, Year 5 balance sheet
Business
1 answer:
kkurt [141]3 years ago
5 0

Answer:

$400,000

Explanation:

Since at December 31, Year 5, Tedd's tax advisor believed that an unfavorable outcome was <u>probable</u>. And a <u>reasonable estimate </u>of additional taxes was $400,000 but could be as much as $600,000.

Although after the Year 5 financial statements were issued, Tedd received and accepted an IRS settlement offer of $450,000.

Tedd should have included an amount of $400,000 as accrued liability in its December 31, Year 5 balance sheet

The reason is that according to the International Financial Reporting Standards, a PROVISION must be made as long as the conditions below were obtainable at year end.

- Existing Condition (which in this case is the tax dispute with the IRS)

- Probable Cash Outflow (which Tedd's Tax adviser confirmed)

- Reliable Estimate of Outflow ( which the scenario stated ''A reasonable estimate of additional taxes was $400,000'')

Hence, such 'reasonable estimate is the appropriate amount for inclusion in the financial statements.

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Priscella pursued a hobby of making bedspreads in her spare time. Her AGI before considering the hobby is $40,000. During 2019 s
daser333 [38]

Answer:

  • Income = $10,000
  • Adjusted Gross Income (AGI) Deduction = $0
  • Claim $10,000 as itemized deduction due to expenses

Explanation:

The activity being a hubby does not exempt it from tax so the $10,000 will be included as income for tax purposes and there will be no deduction for this from the AGI.

She can however, claim her expenses as itemized deductions. There is no tax on interest payment so expenses deducted are:

= 4,000 + 6,500 - 500

= $10,000

7 0
2 years ago
Which of the following is a characteristic of a partnership? a.The partners have limited liability. b.The partnership is subject
Ulleksa [173]

Answer:

The correct answer is letter "C": The partnership has a limited life.

Explanation:

A partnership is an organization with two or more members running a business. They share the profits in percentage terms in proportion to their partnership value. There are two types of partnerships: general partnerships (<em>unlimited liability</em>) and limited partnerships (<em>liability proportional to the contribution to the partnership</em>).

The partnership dissolves and a new partnership is created when one of the partners is removed, retired or deceased or even when a new partner is introduced. Thus, <em>partnerships have a limited life</em>.

8 0
3 years ago
What is the rate of return when 30 shares of Stock
sattari [20]

Answer:

-0.67%

Explanation:

We are told that 30 shares of Stock are purchased for $30/share..

This gives a total value of: 30 × 30 = $900.

Now,they are sold for $900 with a commission of $6. This means the final money getting to the seller is; 900 - 6 = $894.

Thus; rate of return percentage = (894 - 900)/894) × 100% = -0.67%

6 0
3 years ago
____ competitors are those that compete in the same product class, but their products have different features, benefits, and pri
Lina20 [59]
<span>b. brand.......................</span>
4 0
3 years ago
After the accountant of Stallone Retailers had prepared the financial statements for the year ended 31 December Year​ 6, the fol
n200080 [17]

The adjusted profit of Stallone Retailers for the year ended December 31, Year 6 is £115,400.

Data Analysis:

1. Motor Van £8,000 Motor running expense £8,000

Depreciation expense  £1,600 Accumulated depreciation £1,600 ( £8,000 x 20%)

2. Cost of goods sold £3,000 Inventory £3,000

3. Drawings  £4,000 Inventory  £4,000

4. Loan  £2,200 Cash  £2,200

<u>Adjustment of Profit</u>

Profit before the errors  £112,000

Adjustments:

Motor running expense   £8,000

Depreciation expense    (£1,600)

Cost of goods sold         (£3,000)

Adjusted profit            £115,400

Thus, the adjusted profit is now £115,400.

Learn more: brainly.com/question/3816206

4 0
2 years ago
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