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kotykmax [81]
3 years ago
12

In December of Year 4, John (a cash-basis taxpayer) received a $2,000 payment from Tom who signed a year's lease to rent John's

house. The $2,000 payment consisted of the following:
1st Month's Rent (for the month of December, Year 4) $800Last Month's Rent (for the month of December, Year 5) 800Security Deposit (to be returned at end of lease) 400

How much should John include as rental income on his Year 4 tax return as a result of the $2,000 payment?
Business
1 answer:
larisa86 [58]3 years ago
6 0

Answer:

John should include $1,600 as rental income on his Year 4 tax return as a result of the $2,000 payment.

Explanation:

As a cash-basis taxpayer, John's taxable income is based on the actual cash receipts and payments made in the accounting period.  The refundable part of the rent should not be included as rental income since it is a security deposit that would be returned at the end of the lease period.  If John were an accrual-basis taxpayer, the rental income to be included would have been only $800 representing income for Year 4.

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Exercise 5-12 Presented below is the trial balance of Larkspur Corporation at December 31, 2017. Debit Credit Cash $ 200,490 Sal
shutvik [7]

Answer:

       2017 Balance Sheet

$1,368,060  TOTAL CURRENT ASSETS  

$2,637,630  TOTAL NONCURRENT ASSETS  

$4,005,690  TOTAL ASSETS  

   $792,730  TOTAL CURRENT LIABILITIES  

$1,906,980  TOTAL NONCURRENT LIABILITIES  

$2,699,710  TOTAL LIABILITIES  

$1,305,980  TOTAL EQUITY  

$4,005,690  TOTAL EQUITY + LIABILITIES  

Explanation:

Liquidity it's define as the speed of an assets to be converted to cash,

the assets that take less days to buy or to sold are more liquid than others.

Cash it's the assets most liquid then are the Accounts Receivables and Inventories for last, in the middle exist different assets as Equity investments.

Prepaid expenses are not liquid because these accounts doesn't means the company could get cash if not that the company have  rights over something.

      2017 Balance Sheet

$200,490 Cash

$157,080 Debt Investments  

$410,000 Accounts Receivable

$600,490 Inventory

$1,368,060  TOTAL CURRENT ASSETS  

$264,080 Land

$604,080 Equipment

-$60,000 Accum Depreciation

$1,043,490 Buildings

-$152,000 Accum Depreciation

$195,000 Patents

$280,490 Equity  Investments  

$160,000 Other Assets Intangibles

$302,490 Debt Investments  

$2,637,630  TOTAL NONCURRENT ASSETS  

$4,005,690  TOTAL ASSETS  

$459,080  Accounts Payable  

$94,080   Notes Payable  

$100,080  Accrued Liabilities  

$139,490  Dividends Payable  

$792,730  TOTAL CURRENT LIABILITIES  

$903,490  Notes Payable  

$1,003,490  Bond Payable  

$1,906,980  TOTAL NONCURRENT LIABILITIES  

$2,699,710  TOTAL LIABILITIES  

$1,004,080  Common Stock  

-$195,080  Treasury Stocks  

$83,490    Paid in Capital  

$413,490  Retained Earnings  

$1,305,980  TOTAL EQUITY  

$4,005,690  TOTAL EQUITY + LIABILITIES  

Income Statement  

Sales                         $8,104,080  

Depreciation           -$4,800,000  

MARGEN BRUTO   $3,304,080  

Selling Expenses     -$2,004,080  

Adm Expenses            -$901,820  

Interest Expenses         -$212,820  

Income Statement         $185,360  

Investment Revenue        $64,820  

Gain                                 $81,820  

3 0
3 years ago
Which of the following would not be reported as current liabilities on the balance sheet?
olga55 [171]
D. Accounts receivable
6 0
2 years ago
Creative Sound Systems sold investments, land, and its own common stock for $37.0 million, $14.3 million, and $38.6 million, res
worty [1.4K]

Answer:

$18.3 million

Explanation:

Financing activities: It includes those activities which comes under the long term liabilities and shareholder equity balance. The issue of shares is an inflow of cash whereas redemption, dividend, and the purchase of treasury stock is an outflow of cash.

The computation of the amount reported as a net cash flows from financing activities is shown below:

Cash flow from Financing activities  

Issuance of common stock $38.6 million

Less: Purchase of treasury stock -$20.3 million

Net Cash flow from Financing activities           $18.3 million

8 0
3 years ago
How do most companies pay the current liabilities incurred by day-to-day operations?.
elixir [45]

Current assets, or possessions used up within a year, are generally used to settle current liabilities.

<h3>Why do you use the term "current liabilities"?</h3>
  • Current liabilities are debts or commitments that fall due within a year or during the regular business cycle. Additionally, current obligations are paid off by using a current asset, either by generating a fresh current liability or by using cash.
  • In accounting, current liabilities are frequently interpreted as all debts owed by a company that must be paid in cash within the fiscal year or the operational cycle of that particular company, whichever is longer.
  • Current assets, or possessions used up within a year, are generally used to settle current liabilities. Accounts payable, short-term loans, dividends, and notes payable are a few examples of current liabilities, along with any outstanding income taxes.  

To learn more about Current assets refer to:

brainly.com/question/13188114

#SPJ4

6 0
1 year ago
A company received 500 applications for a specific position.30 were given an assignment test. Only 15 were invited to an intervi
morpeh [17]
I think c might be wrong tho
4 0
3 years ago
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