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prisoha [69]
3 years ago
13

Ajax Inc. was formed on April 25 and elected a calendar year for tax purposes. Ajax paid $11,800 to the attorney who drew up the

articles of incorporation and $5,700 to the CPA who advised the corporation concerning the accounting and tax implications of its organization. Ajax began business operations on July 15. To what extent can Ajax deduct its $17,500 organizational costs on its first tax return
Business
1 answer:
Step2247 [10]3 years ago
4 0

Answer: $5416.64

Explanation:

Based on the information given, $5000 will be deducted from its organizational cost of $17500, and we'll have $12500. Then, the capitalized cost over 6 months that's 180 days will be:

= Non deductible cost / 180 months

= $12500 / 180

= $69.44 per month

Since Ajax Inc began operation in July, the ammortization will be:

= $69.44 × 6 months

= $416.64

The amount that Ajax can deduct from its $17,500 organizational costs on its first tax return will be:

= $5000 + $416.64

= $5416.64

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7 0
1 year ago
Which of the following is unconditioned response n
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Answer:

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3 0
3 years ago
The Canadian government decided to issue a consol (a bond with a never-ending interest payment and no maturity date). The bond w
zhenek [66]

Answer:

present value of perpetuity  = $1111.11

present value of perpetuity  = $588.23

if interest rate fall price go up and interest rate rise price go down

Explanation:

given data

bond pay = $50

solution

first we find present value of perpetuity for 6.5 % that is

present value of perpetuity = \frac{cash flow}{discount}     ..............1

present value of perpetuity =  \frac{50}{0.065}

present value of perpetuity  = $769.23

now  present value of perpetuity for 4.5%

so from equation 1 we get

present value of perpetuity =  \frac{50}{0.045}

present value of perpetuity  = $1111.11

and

now  present value of perpetuity for 8.5%

so from equation 1 we get

present value of perpetuity =  \frac{50}{0.085}

present value of perpetuity  = $588.23

so

here we know that current price of perpetuity & discount rate is inversely proportional

so current present value is find by divide cash flow by discount rate

here discount rate higher value of perpetuity

so if interest rate fall price go up and interest rate rise price go down

4 0
2 years ago
The financial statements of Seldin, Inc., provide the following information for the current year: Dec.31 Jan.1 Accounts receivab
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Answer:

a. $133,000

Explanation:

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Beginning                                   ($51,000)

Cost of goods sold                     $130,000

Ending                                         $55,000

Purchases during the year       $134,000

Computation of amount paid for purchases    

Beginning payable                                                   $32,000

Purchase during the year                                        $134,000

Ending payable                                                        ($33,000)

Cash payments for purchases of merchandise   $133,000

4 0
3 years ago
Consider a bond (with par value = $1,000) paying a coupon rate of 7% per year semiannually when the market interest rate is only
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Answer:

Explanation:

Using a financial calculator; input the following;

Duration to maturity ; N = 3*2 = 6

Par value of the bond ; FV = 1000

Semiannual interest rate; I = 3%

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then compute the price; i.e the present value; CPT PV = 1027.09

The price after 6-months would be as follows;

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Par value of the bond ; FV = 1000

Semiannual interest rate; I = 3%

Semiannual coupon payment;PMT = (7%/2)*1000 = 35

then compute the price; i.e the present value; CPT PV = 1022.90

7 0
3 years ago
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