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charle [14.2K]
4 years ago
5

In thinking about the "color of money," which color would correspond to a new video game system charged on a credit card when yo

u don't have the funds to purchase it with cash?
Business
2 answers:
Vikentia [17]4 years ago
6 0
Light blue, green , light red
dimaraw [331]4 years ago
3 0

Answer: Green

Explanation:

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Carl’s business insurance costs $3,000 per year. Carl paid for and purchased a 12-month insurance policy on October 1, Year 1. O
Naddika [18.5K]

Answer:

Carl's Insurance Expense Deduction for Year 2

Since he took advantage of the 12-month prepayments rule, his Year 2 Insurance deduction was deducted in Year 1.

While his deduction should have been equal to

= Annual Insurance Expense/12 x 9 = $3,300/12 x 9 = $2,475

In Year 2, it is equal to $0 since he did not make any payment for Insurance.

Explanation:

Under the cash method of accounting, two rules govern how someone can deduct prepaid expenses:

1. The General Rule

2. The 12-Month Rule

1. The General Rule

Under the general rule, you cannot deduct the full amount of an advance payment covering more than 12 months. You must deduct a portion of the payment in the year to which it applies.

Example: The General Rule.

Carl is a cash method taxpayer on a calendar year.

On October 1, 2018 Carl pays $3,600 in advance for business insurance covering three years.

Coverage begins October 1, 2018.

Coverage ends September 30, 2021.

Result:

The general rule applies.

The advance payment covers more than 12 months (36 months).

A portion of the $3,600 must be deducted ratably over the three-year period.

To find the portion of the $3,600 Carl deduct each tax year:

First, divide the $3,600 by 36 (months) to find the monthly premium amount.

Then, multiply the number of months remaining in each tax year by the monthly premium

Monthly premium: $3,600 / 36 = $100 per month.

Oct. 1, 2018 - Dec. 31, 2018: 3 x $100 = $300 deduction for 2018

Jan. 1, 2019 - Dec. 31, 2019: 12 x $100 = $1,200 deduction for 2019

Jan .1, 2020 - Dec. 31, 2020: 12 x $100 = $1,200 deduction for 2020

Jan. 1, 2021 - Sep. 30, 2021: 9 x $100 = $900 deduction for 2021

The 12-Month Rule

The 12-month rule says that Carl may deduct the full amount of an advance payment in the year the payment is made if it creates rights or benefits for the taxpayer that do not extend beyond the earlier of:

12 months after the right or benefit begins, or

The end of the tax year after the tax year in which payment is made.

Example 1: The 12-Month Rule.

Carl is a cash basis taxpayer on a calendar year.

On October 1, 2018 he pays $2,000 for business insurance covering one year.

The policy begins October 1, 2018 and ends September 30, 2019.

Result:

The 12-month rule applies.

Deduct the full $2,000 in 2018

The benefit does not extend beyond 12 months after the right to receive the benefit begins - October 1, 2018.

3 0
3 years ago
Which person makes original journal entries in the general ledger and reporting system about events such as dividend payments an
Nina [5.8K]

Treasurer-person makes original journal entries in the general ledger and reporting system about events such as dividend payments and payments to creditors

<h3>What does us Treasurer do?</h3>

The Treasurer of the United States has direct oversight over the U.S. Mint, the Bureau of Engraving and Printing and Fort Knox and is a key liaison with the Federal Reserve. In addition, the Treasurer serves as a senior advisor to the Secretary in the areas of neighborhood development and public engagement.

<h3>Why is it referred to as a Treasurer?</h3>

Originally the phrase referred to the individual in charge of the treasure of a noble; however, it has now moved into wider use. In England at some stage in the seventeenth century, a function of Lord High Treasurer was used on a number of events as the 0.33 remarkable officer of the Crown.

<h3>What is the electricity of treasurer?</h3>

He is the individual accountable for controlling monetary complications, making reports, recording finances, and managing the have confidence financial institution accounts.

Learn more about Treasurer here:

<h3>brainly.com/question/1320342</h3><h3>#SPJ4</h3>
8 0
1 year ago
Farad, Inc., specializes in selling used trucks. During the month, Farad sold 50 trucks at an average price of $9,000 each. The
beks73 [17]
$788 to me and my brother in law I come see him
4 0
3 years ago
Pleasant Hills Properties is developing a golf course subdivision that includes 225 home lots; 100 lots are golf course lots and
Solnce55 [7]

Answer:

Explanation:

This is a question about allocation based on how much the street frontage will be valued in future. That value will then be allocated to the joint cost to see how much to apportion to Street Frontage now.

The total value of the Street Frontage after development is,

= 125 lots * $70,000

= $8,750,000

The total value of Golf lots are,

= 100 lots * $100,000

= $10,000,000

Adding them up,

= 10,000,000 + 8,750,000

= $18,750,000

This is the total amount of the company could make and therefore the lot's value.

Company incurred the following costs.

= 1,850,000 * 1,450,000

= $3,300,000

The amount of joint costs to be allocated to Street Frontage will be,

= 8,750,000/ 18,750,000 * 3,300,000

= $1,540,000

The amount to allocate to Street Frontage based on the total value of the lot is $1,540,000.

3 0
3 years ago
Your store sales average 190000 per month your triple net lease has tbe following monthly terms: rent is 5% of sales insurance i
maks197457 [2]

The next year's annual lease payment is $129,240. The term “Lease Payment” is analogous to the rental payment. It refers to the payment created between the owner and renter, per the contract.

A Lease payment refers to the amount that's adequate for the monthly rent prearranged in an exceedingly contract by 2 parties.

Step 1: Verify next year's regular payment.

Since next year, the sales regular payment can have increased by seven-membered, we can verify next year's annual sales as shown:

F=P(1+R)

where;

Next year regular payment

This year's regular payment

R=salary increase rate

In our case;

F=unknown, to be determined

P=190,000 per month

P=(190,000×12)=$2,280,000 annually

R=5%=5/100=0.05

replacing;

F=2,280,000(1+0.05)=$2,394,000

Step 2: Verify next year's rent.

Next years rent=0.05×2,394,000=$119,700

Step 3: Verify insurance, maintenance, utilities and total annual taxes.

Total=annual insurance payments+annual maintenance payments+annual utilities payments+annual taxes

Total=(300×12)+(75×12)+(300×12)+(120×12)=$9,540

Step 4: Verify next year's annual lease payments.

Next year's annual lease payments=next year's rent payment+ insurance+maintenance+utilities+annual taxes

where;

Next year's rent payment=$119,700

Insurance+maintenance+utilities+annual taxes=$9,540

replacing;

Next years annual lease payments=(119,700+9,540)=$129,240

Next year's annual lease payments=$129,24

To learn more about lease payment, visit here

brainly.com/question/17196771

#SPJ4

4 0
1 year ago
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