Answer:
264,136 Cash flow for Nimitz Rental
Explanation:
<u>First we calculate the net income:</u>
871,731 Sales
-352,928 general and administrative expenses
-131,455 depreciation expenses
-108,195 leasing expenses
-78,122 interest expenses
201,031 Income before taxes
(68350) Income tax expense
<em>132,681 Net income</em>
<u>Then we remove the non-monetary expense</u>
<em>132,681 Net income</em>
+131,455 depreciation expense
264,136 Cash flow for Nimitz Rental
Answer:
a)Jada's basis for depreciation in the property is NIL.
b) Personal property that has no intrinsic value is called 'INTANGIBLE PROPERTY'.
Explanation:
Due to a decline in the property values over the past few years Jada has converted her personal residence to rental property and/or investment property which is a subject dealt within IAS 40 (Investment property).
According to IAS 40 an investment property is land or building held to earn rentals or for capital appreciation or both rather than use in the entity. IAS 40 requires to initially measure investment property at cost and subsequently may either measure at cost or fair value model. Fair value is normally established by prevailing market prices.
IAS 40 also mentions that if an asset is revalued to fair value the gain and loss should be recorded in statement of profit and loss and 'NO DEPRECIATION IS CHARGED ON THE ASSET AFTER THE FAIR VALUE MEASUREMENT'.
Therefore, following the instructions laid out by IAS 40 Jada's basis for depreciation in the property is NIL.
2) Personal property with no intrinsic value:
Personal property that has no intrinsic value is called 'INTANGIBLE PROPERTY'.
Lets first understand what intrinsic value is. Intrinsic value of an asset refers to the market led and/or market-driven price of that asset. This means those assets which don't have an active market for sale and purchase will have no intrinsic value. This is absolutely the case with intangible assets, because most intangible assets are unique and uncommon, such as, GOODWILL, PATENTS, COPYRIGHTS, therefore due to the uniqueness and exclusivity of such assets an active market place doesn't exist therefore it's hard to determine an intrinsic value for such kind of assets/ properties.
<span>commitment to meeting quality standards (as established through ISO 9000) and more specifically, environmental quality standards (as specified by ISO 14000). The International Organization for Standards is responsible for establishing these standards.</span>
Answer:
income tax expense 756,000 debit
deferred tax assets 184,000 debit
income tax payable 940,000 credit
Explanation:
As we are taxes as we collect but, for accounting reasons we reocngize gains under accrual method we have a portion of unearned reveneu which generates a deffered tax assets as next year this amount will not generate a tax payable:
unearned revenue 460,000
deferred tax assets: 460,000 x 40% = 184,000
income tax payable 940,000
- deferred tax assets<u> 184,000 </u>
income tax expense 756,000