1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Basile [38]
3 years ago
8

On November 1 of year 0, Jaxon borrowed $50,000 from Bucksnort Savings and Loan for use in his business. In December, Jaxon paid

interest of $4,500 relating to the 12-month period from November of year 0 through October of year 1.a. How much interest, if any, can Jaxon deduct in year 0 if his business uses the cash method of accounting for tax purposes?b. How much interest, if any, can Jaxon deduct in year 0 if his business uses the accrual method of accounting for tax purposes?
Business
1 answer:
Stels [109]3 years ago
4 0

Answer:

a. $750

b. $750

Explanation:

The first thing to do is calculate the monthly interest as follows:

Monthly interest = Total interest ÷ 12 = $4,500 ÷ 12 = $375

The rent for two months in year 0 (November and December) = $375 × 2 = $750.

Prepaid expenses (January to October of year 1) = $4,500 - $750 = $3,750.

Decision:

Prepaid expenses is not deductible under either cash accounting method or accrual accounting method for tax purposes.

Therefore, Jaxon can deduct only $750 two months (November and December) relevant for year 0 under both cash accounting method and accrual accounting method.

The prepaid expenses of $3,750 is not deductible in year 0 but can only be deducted in year 1.

You might be interested in
Here a rap what yall think its called disrespect
ahrayia [7]

Answer:

about ppl disrespecting you

7 0
2 years ago
Read 2 more answers
Pettit Company reports net income of $90,000 in 2019. However, ending inven- tory was understated $7,000. What is the correct ne
zimovet [89]

Answer:

<em>a)Corrected net income= $97,000</em>

<em>b) Total assets figure is understated.</em>

Explanation:

<em>To arrive at the net income, cost of goods sold is usually deducted from the sales revenue. An cost of sold is determined by subtracting the value of inventory. So an understated inventory would mean an overstated </em><em>cost of goods sold </em><em>and </em><em>understated net income</em>

<em>Correct net income = 90,000 + 7,000</em>

<em>                                 = $97,000</em>

<em>Inventory is part of current assets s reported in the balance sheet . Therefore, if inventory is understated it implies that the current assets figure is understated and therefore the</em><em> total assets figure is understated.</em>

<em />

8 0
3 years ago
Omega Custom Cabinets produces and sells custom bathroom vanities. The firm has determined that if it hires 10 workers, it can p
adell [148]

Answer:the correct answer is A. For the 11th worker, the marginal profit is $600.

Explanation:

10 men             20  vanities per week

11   men            22 vanities per week

1 man more       2 vanities more

If the company uses 1 man more produces 2 vanities more, so the company spends $1000 on the extra man and makes 2*$800= $1,600 (for two extra vanities). For the 11th worker, the marginal profit is = $1600-$1000= $600

6 0
3 years ago
Assume that Horicon Corp acquired 25% of the common stock of Sheboygan Corp. on January 1 for $300,000. During the year Sheboyga
sergejj [24]

Answer:

Cash $60,000 (debit)

Investment Income $60,000 (credit)

Explanation:

It is Important to note that the Acquirer (Horicon Corp) is a Corporate.

The Acquisition of 25% of the common stock of Sheboygan Corp constitute an Asset for Horicon Corp since Economic Benefits are expected to be received from the Investment.

The Receipt of Dividends from these shares will constitute Investment Income and the entry is as follows :

Cash $60,000 (debit)

Investment Income $60,000 (credit)

6 0
3 years ago
Read 2 more answers
1. You will receive a Financial Aid Award Letter... *
Marrrta [24]
After you have completed the FAFSA and applied to colleges
5 0
3 years ago
Other questions:
  • An end items demand forecasts for the next 10 weeks are 30, 20, 35, 50, 25, 25, 0, 40, 0, and 50 units. The cur-rent on-hand inv
    8·1 answer
  • Which of the following scenarios describes an offer?a.Raoul asks Wendy if she would be willing to sell her first-edition copy of
    9·1 answer
  • You dream of endowing a chair in finance at the local university that will provide a salary of $250,000 per year forever, with t
    10·1 answer
  • Which of the following policies are consistent with the goal of increasing productivity and growth in developing countries? Chec
    8·1 answer
  • Linda is a qualifying widow in 2018. In 2018, she reports $80,000 of taxable income (all ordinary). What is her gross tax liabil
    5·1 answer
  • What is a construction foreman
    12·2 answers
  • 37. Wal-Mart surveys its employees annually as part of its "Grass Roots" program. The survey is designed to assess employees’ pe
    6·1 answer
  • WoodCore Inc. produces an entire line of office furniture at its manufacturing facility in the United States and then ships its
    6·1 answer
  • With milk sales sagging of late, The Milk Processor Education Program (MPEP) decided to move on from the famous "Got Milk" ad sl
    7·1 answer
  • In two or more complete sentences, compare and contrast making a purchase with a debit card versus making a purchase with a cred
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!