Answer:
D) Only $7,000 of the office expenses can be deducted; the remaining $1,000 can be carried forward to future tax years.
Explanation:
Since Gene's profit before home expenses is only $7,000, he can only deduct up to $7,000 for this year. That way his net profit will be $0. The remaining $1,000 must be carried forward so that he can use them in the future, probably next year he will add them to his deductions. If a business losses money, the government pay you anything, taxes only work one way, you have to pay.
Answer:
The double-exempt bond is the preferred investment because it has a higher after-tax return Tax benefit .
Explanation:
Calculatation of the after-tax return on both bonds
1)The double-exempt bond does not pay state or federal income taxes.
After-tax return =
Before-tax return = 4.9%
2)The tax-exempt bond is the state income taxes, but not federal in which the states can decide whether to tax their bonds or not.
Interest Income (100,000 * 5%) 5,000
Less: State taxes at 10% (5,000* 10%) (500)
Tax benefit from deduction of state taxes on federal return (500 * 35%) 175
After-tax Income 4,675
After-tax return = 4,675/100,000 = 4.675%
Therefore the double-exempt bond is the preferred investment because it has a higher after-tax return Tax benefit .
Hence the state income tax will be deductible on Juan’s federal tax return and Juan’s federal taxable income will be lower or lesser by $500 which will produces tax savings at his federal marginal tax rate of $500 * 35% = $175.
Answer:
$32,300
Explanation:
With regards to the above, the amount of total assets is the addition of current assets + Fixed assets.
= Accounts receivables + Cash + Truck equipment
= $7,000 + $7,300+ $8,000 + $10,000
= $32,300
Therefore ,
Total assets = $32,300
Answer:
1. Record the time worked on a client project by professional staff.
The first thing is do is to record the time the client was worked on by a professional staff because CPAs should be charging by the hour.
2. Record the completion of a client project.
The record the completion of a client project so that the project can be considered finished. The total hours worked will be totalized here.
3. Record the application of office overhead.
After the completion of the project the overhead costs are now apportioned and recorded.