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GREYUIT [131]
3 years ago
12

1-Firm B uses the calendar taxable year and the cash method of accounting. On December 31, 20x6, Firm B made certain cash paymen

ts. To what extent can it deduct the payment in 20x6? (Please note: payments for assets to be consumed in the following year are fully deductible in the year of payment if the expenditure results in a benefit with a duration of 12 months or less and is consumed by the end of the following year.)
a) $3,000 compensation to a consultant who spent three weeks in January 20x7 analyzing B’s internal control system.
b) $500,000 to purchase a new piece of manufacturing equipment. The equipment was delivered on January 8, 20x7 and has a useful life of 5 years.
c) $16,900 property tax to the local government for the first six months of 20x7.
d) $50,000 for a two-year lease beginning on February 1, 20x7.
e) $23,700 of inventory items held for sale to customers.
Business
1 answer:
Karolina [17]3 years ago
8 0

Answer:

a) $3,000 compensation to a consultant who spent three weeks in January 20x7 analyzing B’s internal control system.

  • $3,000 recognized in 20x6

Cash basis accounting doesn't recognize prepaid expenses that last less than 12 months, therefore, this expense will be recognized in the year that it was paid for regardless if the actual expense took place on a later date. The same applies for rent, insurance, etc.  

b) $500,000 to purchase a new piece of manufacturing equipment. The equipment was delivered on January 8, 20x7 and has a useful life of 5 years.

  • $0 recognized in 20x6

If you use modified cash basis accounting, you must capitalize fixed assets and depreciate them. You would recognize depreciation expense during the following 5 years.

c) $16,900 property tax to the local government for the first six months of 20x7.

  • $16,900 recognized in 20x6

Since you paid your taxes in 2016, you must recognize them.

d) $50,000 for a two-year lease beginning on February 1, 20x7.

  • $0 recognized in 20x6

The 12 month rule doesn't apply, therefore, you must recognize rent during 20x7 and 20x8.

e) $23,700 of inventory items held for sale to customers.

  • $0 recognized in 2016

Even for cash basis accounting, inventory is a permanent account in the balance sheet and it cannot be expensed until sold.

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The answer is 2.5

Explanation:

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Multiplier = 1/ 1-mpc= 1/ mps

Multiplier = 1/ 1-0.6 = 1/ 0.4 = 2.5

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3 years ago
The assets for BIZZ0 in 2018 were $187,300; the liabilities for that year were $275,600; and the net income was $17,700. What wa
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Answer: 9.45%

Explanation:

From the question, we are informed that the assets for BIZZ0 in 2018 were $187,300, the liabilities for that year were $275,600; and the net income was $17,700.

The return on income for the year will be:

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= ($17,700 / $187,300) × 100

= 0.0945

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2 years ago
With regard to the current exchange rate arrangement between italy and germany, it is best characterized as?
Ira Lisetskai [31]

With regard to the current exchange rate arrangement between Italy and Germany, it is best characterized as C) an exchange arrangement with no separate legal tender.

In a floating regime, trade costs are generally decided via the market forces of delivery and demand for foreign exchange. for many years, floating exchange costs were the regime utilized by the arena's foremost currencies – this is, the us dollar, the euro region's euro, the Japanese yen, and the United Kingdom pound sterling.

A fixed or pegged price is determined by the authorities through its important bank. The rate is set towards every other essential world currency (together with the U.S. greenback, euro, or yen). To maintain its exchange rate, the authorities will buy and sell its very own forex in opposition to the currency to which it's far pegged.

Exchange rates are decided through elements, along with interest costs, self-assurance, the modern account on stability of payments, economic growth, and relative inflation fees.

Disclaimer: The question is incomplete. Please read below to find the missing content.

Question: With regard to the current exchange rate arrangement between Italy and Germany, it is best characterized as:

A) independent floating (market-determined).

B) managed float.

C) an exchange arrangement with no separate legal tender.

D) pegged exchange rate within a horizontal band.

Learn more about the exchange rate here brainly.com/question/25970050

#SPJ4

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1 year ago
"a manufacturer of deep-sea oil rigs may be least concerned about which of these marketplace forces?"
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I guess the correct answer is New market entrants

A manufacturer of deep-sea oil rigs may be least concerned about new market entrants.

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