Answer:
Gross profit = net sales revenue - cost of goods sold. But what happens when your company doesn't sell any goods, specially if they only sell services and it is impossible to determine the COGS.
This is basically an accounting issue since the <u>IRS</u> defines COGS as:
- <em>The cost of products or raw materials, including freight </em>
- <em>Storage
</em>
- <em>Direct labor costs (including contributions to pensions or annuity plans) for workers who produce the products
</em>
- <em>Factory overhead the cost of inventory items sold </em>
So if your company doesn't sell any items from inventory, the IRS will not consider that your company incurred in COGS.
Reporting COGS is very useful for deducting business expenses, but it is not mandatory. Also, any expenses deducted as COGS cannot be deducted again as any other type of cost. So it is simply an accounting practice that helps certain industries to report their business expenses more clearly and in an orderly manner. But if it is too complicated to determine your company's COGS, then you can report your expenses in other ways and reduce your problems.
Answer:
Journal entry to record Smith's payment
- Dr Cash account 500
- Cr Accounts Receivable account 500
Explanation:
The following journal entry was made when the account was written off:
- Dr Bad Debt Expense account 500
- Cr Accounts Receivable account 500
When the write off was reversed the following journal entry was made:
- Dr Accounts Receivable account 500
- Cr Bad Debt Expense account 500
A change in the number of sellers in an industry changes the quantity available at each price and thus changes supply. An increase in the number of sellers supplying a good or service shifts the supply curve to the right; a reduction in the number of sellers shifts the supply curve to the left.
Answer:
B) an increase of $1,000 (based on the new tax cut)
A) zero for years ended December 31th 2017 or before.
Explanation:
On the recent tax cut of 2018 the hobbies deduction was negated.
The itemized deduction for hobbies is no longer valid in the new fiscal system.
In the previous tax laws Hobbies weren't treated as business as they seek enternainment not profit. It was available to deduct up to the revenues generates from the hobbies.
Answer:
$720
Explanation:
Data provided in the question:
Amount spent on mulch = $200
Amount spent on flowers and plants = $225
Amount spent on gasoline and lawn mower maintenance = $245
Amount spent on fertilizer for his lawn = $50
service of spreading = $500
service of distributing fertilizer = $50
expenditure = $1,200 per year
Now,
Johan's landscaping and yard work contribution to GDP
= Amount spent on mulch + Amount spent on flowers and plants + Amount spent on gasoline and lawn mower maintenance + Amount spent on fertilizer for his lawn
= $200 + $225 + $245 + $50
= $720
Hence,
Johan's landscaping and yard work contribution to GDP is $720
