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Tamiku [17]
3 years ago
13

Charlotte (age 40) is a surviving spouse and provides all of the support of her four minor children, who live with her. Charlott

e also maintains the household in which her parents live, and she furnished 60% of their support. Besides interest on City of Miami bonds in the amount of $5,500, Charlotte's father received $2,400 from a part-time job. Charlotte earns an $80,000 salary, a short-term capital loss of $2,000, and a cash prize of $4,000 at a church raffle. Charlotte reports itemized deductions of $10,500. Using the Tax Rate Schedules, compute the 2012 tax liability for Charlotte.
Business
1 answer:
Juliette [100K]3 years ago
3 0

Answer:

Tax = $5,445

Explanation:

Given

Salary = $80,000

Short-term capital loss = $2,000

Cash prize = $4,000

Personal and dependency exemptions = $4,000*7 = $28,000

Standard deductions = $11,900 (for surviving spouse in 2012)

Calculating AGI

AGI = Salary - Capital Loss + Cash Prize

AGI = $80,000 - $2,000 + $4,000

AGI = $82,000

Calculating Taxable Income

Taxable Income = AGI - Personal And Dependency Exemption - Standard Deductions

Taxable Income = $82,000 - $28,000 - $11,900

Taxable Income = $42,100

From The Federal Income Tax Brackets for 2012,

Charlotte falls with the 15% tax bracket.

There are 15% tax, so we calculate as follows:

10% of the first bracket is

$17,400 * 10% = $1,740

15% is the amount in the second bracket

15% of (42,100 - 17400) = 3,705

Tax = $3,705+ $1,740

Tax = $5,445

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A market-oriented organization believes that the social and economicjustification for an organization's existence is the satisfa
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8 0
3 years ago
Wendell’s Donut Shoppe is investigating the purchase of a new $40,000 donut-making machine. The new machine would permit the com
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Answer:

initial outlay $40,000

savings per year = $5,200

additional contribution margin = 2,000 x $2.40 = $4,800

machines useful life = 6 years

1) total annual cash flows (assuming no residual value)

Year₀ = -$40,000

Year₁ = $5,200 + $4,800 = $10,000

Year₂ = $10,000

Year₃ = $10,000

Year₄ = $10,000

Year₅ = $10,000

Year₆ = $10,000

2) to determine IRR we can use a financial calculator or the present value of an annuity formula:

PV = annual payment x annuity factor

PV = $40,000

annual payment = $10,000

annuity factor = $40,000 / $10,000 = 4

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we have 6 periods, and we must look for an interest rate that results in an annuity factor of 4 = 13% (the exact annuity factor is 3.998)

using a financial calculator, the IRR = 12.98%, which we can round to 13%

4) the cash flows will be:

Year₀ = -$40,000

Year₁ = $10,000

Year₂ = $10,000

Year₃ = $10,000

Year₄ = $10,000

Year₅ = $10,000

Year₆ = $20,515

We cannot use the annuity formula now because our annuities are not equal. Using a financial calculator, IRR = 16.99%

6 0
3 years ago
Read the description of following adjustments that are required at the end of the accounting period for Paulo Consulting Service
exis [7]

Answer:

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Depreciation is computed using the straight-line method.

depreciation expense per year = ($49,770 - $4,270) / 5 years = $9,100

depreciation expense per month = $9,100 / 12 = $758.33

January 31, 2019, depreciation expense

Dr Depreciation expense 758.33

    Cr Accumulated depreciation - equipment 758.33

B. Signed a 5-month contract for $5,490 of prepaid advertising on January 1, 2019.

advertising expense per month = $5,490 / 5 = $1,098

January 31, 2019, advertising expense

Dr Advertising expense 1,098

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C. Prepaid rent for the year on January 1, 2019, in the amount of 22,560.

rent expense per year = $22,560 / 12 = $1,880

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Dr Rent expense 1,880

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D. Purchased supplies for $4,200 on January 1, 2019. Inventory of supplies was $2,850 on January 31, 2019.

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8 0
3 years ago
Sadler Corporation purchased equipment to be used in manufacturing. The purchase was made at the beginning of 2015 by paying cas
beks73 [17]

Answer:

a) Debit Depreciation expense  $14,000

   Credit Accumulated depreciation  $14,000

Being entries to record depreciation expense for 2016

b) Debit Depreciation expense  $26,666.67

   Credit Accumulated depreciation  $26,666.67

Being entries to record depreciation expense for 2017

The effect of a change in estimate is a reduction of the annual depreciation from $14,000 to $26,666.67 (increase of $12,666.67) annually

Explanation:

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Annual depreciation

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At the beginning of 2017,

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= $124,000

If  Sadler concluded that the total useful life of the equipment will be 8 years rather than 10, and that the residual value will be zero.

Depreciation expense for 2017

= $124,000/6

= $26,666.67

5 0
3 years ago
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