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Dmitry_Shevchenko [17]
3 years ago
13

Jebali Corporation, a calendar year taxpayer utilizing the completed contract method of accounting, constructed a building for S

amson, Inc., under a long-term contract. The gross contract price was $2,300,000. Jebali finished construction in 2019 at a cost of $2,100,000. However, Samson insisted that Jebali redo the doorway; otherwise, the contract price would be reduced. The estimated cost of redoing the doorway is $80,000. In 2020, the dispute is settled and Jebali fixed the doorway at a cost of $65,000. a. How much must Jebali include in gross income
Business
1 answer:
melamori03 [73]3 years ago
7 0

Answer:

Jabeli must include = $2,220,000

Explanation:

As per the data given in the question,

Gross Income in 2019 = $2,300,000 - $80,000

= $2,220,000

So, Jabeli should include $2,220,000 in gross income and Jabeli is allowed to deduct $2,100,000 in 2019

In completed contact method of accounting :

Till the contract is completed and accepted, no revenue from the contract is recognized

In this case the purchaser may desire additional work to be done on a long term contract.

The regulations do not provide any amount of income(or loss) until the dispute is resolved.

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Not knowing the question involved, I'll respond. .. The receiver paraphrases what the sender sent.
5 0
3 years ago
The ending inventory of finished goods for each quarter should equal 20% of the next quarter's budgeted sales in units. The fini
ale4655 [162]

Answer:

Instructions are below.

Explanation:

Giving the following information:

The ending inventory of finished goods for each quarter should equal 20% of the next quarter's budgeted sales in units. The finished goods inventory at the start of the year is 3,600 units.

<u>We weren't provided with enough information to solve the problem. But, I will leave the formula and a small example to guide an answer.</u>

<u></u>

Purchases= sales + desired ending inventory - beginning inventory

For example:

Sales 2nd Quarter= 27,000 units

Sales 3rd Quarter= 45,000 units

Production budget (in units):

Sales= 27,000

Desired ending inventory= (45,000*0.20)= 9,000

Beginning inventory= (3,600)

Total= 32,400 units

5 0
3 years ago
Depreciation: Is the process of allocating to expense the cost of a plant asset. Measures the decline in market value of an asse
Bess [88]

Answer:

A. Is the process of allocating to expense the cost of a plant asset.

Explanation:

Depreciation can be defined as a process in which the monetary or financial value with respect to an asset decrease or falls over time as a result of wear and tear.

Depreciation is the process of allocating to expense the cost of a plant asset.

7 0
2 years ago
You are earning $40,000 per year as a branch manager at Dunkin Donuts. You are planning on leaving your job and going back to co
sergij07 [2.7K]

Answer:

It increases the opportunity cost because you are foregoing more money for college.

Explanation:

Opportunity cost is the benefit profit, or value of something that is missed or given up when an individual chooses one alternative over another.  

The 10% rise in salary offered by the branch manager increases the opportunity cost of going to college. This is because the higher cost (money) you could have earned by not going to college is foregone.

3 0
3 years ago
Equipment was purchased for $300,000. Freight charges amounted to $14,000 and there was a cost of $40,000 for building a foundat
aksik [14]

Answer:

b)

Annual Depreciation expense= $58,800

Explanation:

<em>According to International Accounting standards(IAS) 16 property plan and equipment (PPE), the cost of an asset is the purchase cost plus other costs of bringing it to the intended working conditions.</em>

So we will add the purchase cost to installation  , freight charges.

Cost of assets = 300,000 + 14,000 + 40,000 =$354,000

Annual depreciation = (Cost - Scrap Value)/ Number of years

                                   = (354,000 - 60,000)/5

                                 =$58,800

Annual Depreciation expense= $58,800

8 0
3 years ago
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