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Inga [223]
3 years ago
7

Simon lost $5,000 gambling this year on a trip to Las Vegas. In addition, he paid $2,000 to his broker for managing his $200,000

portfolio and $1,500 to his accountant for preparing his tax return. In addition, Simon incurred $2,500 in transportation costs commuting back and forth from his home to his employer's office, which were not reimbursed. Calculate the amount of these expenses that Simon is able to deduct, assuming he itemizes his deductions, in each of the following situations: a. Simon's AGI is $40,000. b. Simon’s AGI is $200,000.
Business
1 answer:
garik1379 [7]3 years ago
3 0

Answer:

a. $2,700

b. $0

Explanation:

a. $2,700

The $5,000 gambling losses will not be deducted.

The transportation costs will not be deducted because it is his personal expenses.

Deductibles will include his investment fees  of $2,000 and tax return fees of $1,500 and the total  sum of fees must fall below 2% of his Adjusted Gross Income before any deduction can be computed.

=(2% x $40,000) = $800

=$2,000 + $1,500 – $800 = $2,700

b. $0

The $5,000 gambling losses will not be deducted.

The transportation costs will not be deducted because it is his personal expenses.

Deductibles will include his investment fees  of $2,000 and tax return fees of $1,500 and the total  sum of fees must fall below 2% of his  Adjusted Gross Income.

=(2% x $200,000) = $4,000

=$2,000 + $1,500 = $3,500

Note - The However, because the 2% AGI (2% x $200,000 AGI = $4,000) exceeds the sum of the broker management fees ($2,000) and the tax return fees ($1,500). He won't deduct anything

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Spencer Chemical Corporation produces an oil-based chemical product which it sells to paint manufacturers. In 2019, the company
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Answer:

Total incremental net income = $28,000

Incremental per gallon increase in net income = $0.70 per unit

Explanation:

a. The preparation of incremental statement to find out the increase in net income

Total production                                  $140,000

Less:

Incremental cost

Direct material              $68,000

($1.70 × 40,000 gallons)

Direct labor                  $24,000

($0.60 × 40,000 gallons)

Variable manufacturing

overhead                     $20,000

($0.50 × 40,000 gallons)

Total incremental cost                      ($112,000)

Total incremental net income          $28,000

b. Incremental per gallon increase in net income = Total incremental net income ÷ Total quantity

= $28,000 ÷ 40,000 gallons

= $0.70 per unit

Therefore the total incremental net income is $28,000 and incremental per gallon increase in net income is $0.70 per unit.

5 0
3 years ago
The primary purpose of parks and natural areas is for recreation and human use. true or false
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<span>True. Parks and natural areas provide an avenue for humans to conduct adventure programs and activities. with proper stewardship and preservation, parks and natural areas provide a conducive place for outdoor recreation and education programs that may lead to increased health, wellness, and community participation.</span>
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Suppose a self-regulating economy is in a recessionary gap at the time the Fed enacts expansionary monetary policy. Furthermore,
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The combination of expansionary monetary policy and a self-regulating economy will cause real GDP will rise to the level above natural real GDP and the recessionary gap would hence turn into an inflationary gap situation.

<h3>What do you mean by monetary policy?</h3>

Monetary Policy refers to the control of the quantity of money available in an economy through which new money is supplied.

The self-regulating economy experiences a recessionary gap. The real GDP is less than the level of natural real GDP. The gap is been corrected by the rightward shift in the short-run aggregate supply curve.

Due to interplay, real GDP will rise to the level above natural real GDP and the recessionary gap turn into an inflationary gap.

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8 0
2 years ago
A five-year project has a projected net cash flow of $15,000, $25,000, $30,000, $20,000, and $15,000 in the next five years. It
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The value of Net present value is $12,895.45.

Given that

initial investment = $50,000

1st-year cash flow = $15,000

2nd-year cash flow =$ 25,000

3rd-year cash flow =$ 30,000

4th-year cash flow = $20,000

5th-year cash flow = $15,000

rate = 20%

using formula

NPV = \frac{R}{({1+i})^t}

NPV = \frac{15000}{({1+0.20})^5}\\NPV = 12895.45

<h3>What is Net Present value?</h3>
  • The current value of a future stream of payments from a business, project, or investment is determined using net present value, or NPV.
  • You must predict the timing and size of future cash flows in order to determine NPV, and you must choose a discount rate that is equal to the least allowable rate of return.
  • Your cost of capital or the rewards offered by substitute investments with comparable risk may be reflected in the discount rate.
  • Positive NPV indicates that the rate of return on a project or investment will be higher than the discount rate.
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4 0
1 year ago
Cayuga Hardwoods produces handcrafted jewelry boxes. A standard-size box requires 8 board feet of hardwood in the finished produ
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Answer:

$44 per case.

Explanation:

If  A standard-size box requires 8 board feet of hardwood in the finished product. In addition, 2 board feet of scrap lumber are normally left from the production of one box. Hardwood costs $4.00 per board foot, plus $1.50 in transportation charges per board foot.

Then, To calculate the standard cost of direct materials for the jewelry box, we multiply the direct materials standard price of $4.00 (plus the transportation costs of 1.50 per board foot) by the direct materials standard quantity of 8 feet (8 board feet of hardwood in the finished product) per unit.

The result is a standard direct materials cost of $44 per case.

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