Mr. Macal started an auto trading business and invested 50000 dollars in this business He sold his cars to a car shop for 60000 dollars November 1 The store paid him 50000 dollars in cash The $ 10,000 fee will also be paid one month later (31 November According to the accrual, Mr. Macal's income is 60000 $ a) Please give a different example of accruals, and write a numeric example for it with accounting entries. b) Please classify differences between accrued expenses, payables, and provisions. Give an example for each one.

Mr. Macal started an auto trading business and invested 50000 dollars in this business He sold his cars to a car shop for 60000 dollars November 1 The store paid him 50000 dollars in cash The $ 10,000 fee will also be paid one month later (31 November According to the accrual, Mr. Macal's income is 60000 $ a) Please give a different example of accruals, and write a numeric example for it with accounting entries. b) Please classify differences between accrued expenses, payables, and provisions. Give an example for each one.

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter4: Gross Income: Concepts And Inclusions

Section: Chapter Questions

Problem 33P

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Mr. Macal started an auto trading business and invested 50000 dollars in this business He sold his cars to a car shop for 60000 dollars November 1 The store paid him 50000 dollars in cash The $ 10,000 fee will also be paid one month later (31 November According to the accrual, Mr. Macal's income is 60000 $ a)Please classify differences between accrued expenses, payables, and provisions. Give an example for each one.
Mr. Macal started an auto trading business and invested 50000 dollars in this business He sold his cars to a car shop for 60000 dollars November 1 The store paid him 50000 dollars in cash The $ 10,000 fee will also be paid one month later (31 November According to the accrual, Mr. Macal's income is 60000 $ A) Please classify the differences between accrued expenses, debts and provisions according to the above information. .
Blue Company, an architectural firm, has a bookkeeper who maintains a cash receipts and disbursements journal. At the end of the year (2019), the company hires you to convert the cash receipts and disbursements into accrual basis revenues and expenses. The total cash receipts are summarized as follows. The accounts receivable from customers at the end of the year are 120,000. You note that the accounts receivable at the beginning of the year were 190,000. The cash sales included 30,000 of prepayments for services to be provided over the period January 1, 2019, through December 31, 2021. a. Compute the companys accrual basis gross income for 2019. b. Would you recommend that Blue use the cash method or the accrual method? Why? c. The company does not maintain an allowance for uncollectible accounts. Would you recommend that such an allowance be established for tax purposes? Explain.
Chuck recently purchased brand new equipment for his sign making business. He received an invoice for $3,625 dated March 22 with terms 4/10, 2/20, n/60. Chuck paid $1,225 on April 1 and $480 on April 11. What balance was still owed after April 11? Your Answer:
S. Waweru starts business on 1st July 2020, when he deposits Shs. 18,000 into his business bank account and Shs. 2,500 in his cash account. During the month of July, he undertakes the following transactions:- 2020 July 3 He purchases shop fittings for sh. 2,500 and pays by cheque. July 4 He buys a motor vehicle from AB & Co. on credit Sh. 3,000. July 6 He buys stock for Sh. 1,500 and pays through bank. July 8 He sells goods for cash Sh.1,000. July 10 Buys goods on credit from XY & Co. for Sh. 1,200 July 12 Sells goods to A. Smith for Sh. 900 on credit July 13 Pays wages Sh. 120 by cash July 14 A. Smith returns goods worth Sh. 200 July 15 Pays to AB & Co. Sh. 3,000 by cheque July 17 Goods returned to XY & Co. amounting to Sh. 350 July 21 Receives from A. Smith a cheque for Sh. 700 July 25 Sells goods for cash Sh. 300. July 30…
S. Waweru starts business on 1st July 2020, when he deposits Shs. 18,000 into his business bank account and Shs. 2,500 in his cash account. During the month of July, he undertakes the following transactions:- 2020 July 3 He purchases shop fittings for sh. 2,500 and pays by cheque. July 4 He buys a motor vehicle from AB & Co. on credit Sh. 3,000. July 6 He buys stock for Sh. 1,500 and pays through bank. July 8 He sells goods for cash Sh.1,000. July 10 Buys goods on credit from XY & Co. for Sh. 1,200 July 12 Sells goods to A. Smith for Sh. 900 on credit July 13 Pays wages Sh. 120 by cash July 14 A. Smith returns goods worth Sh. 200 July 15 Pays to AB & Co. Sh. 3,000 by cheque July 17 Goods returned to XY & Co. amounting to Sh. 350 July 21 Receives from A. Smith a cheque for Sh. 700 July 25 Sells goods for cash Sh. 300. July 30…
Accounting On 1 April 2021, Michael commenced business as a plumber. His business is not registered for GST. He put into a business bank account his savings of $50,000. He also owns a van worth $11,000 which he uses solely for business purposes. Michael provided you with the following information. • Debtors (Accounts Receivable) at 31 March 2022 were $21,000 and materials on hand cost $2,000. • During the year Michael had withdrawn $1,000 per month for housekeeping and had transferred $24,000 from the business bank account to deposit for ownership of an apartment he intends to live in. • New plant and machinery had a book value of $7,500 and there was a new delivery van at $20,000 which had been purchased on 1 March 2022. When Michael bought the new delivery van, he traded in his old van for $7,000; paid $11,000 cash and got a finance company loan for the balance. • Michael owed creditors $4,000 and had an overdraft at the bank of $5,200. Required: Prepare a BALANCE SHEET as at 31…
Can you explain how you got the $1,170 on July 31st transaction?
On July 1, 2020, Arabi Sheikh established an interior decorating business. During the month, Arabi Sheikh completed the following transactions related to the business: July 1: Arabi transferred cash from his personal account and invested it for business use, $23500. July 10: Purchased a truck for $14900, paying $7200 cash and the remainder will be paid in the future. July 12: Paid annual premiums on property and casualty insurance (advance), $2570. July 17: Paid creditor a portion of the amount owed for truck purchased on July 10, $4220. July 20: Completed services on account and billed the customer, $7310 July 25: Received cash from customers on account, $3520. July 31: Paid salaries expense of $460 and utilities expense of $300. (a) Journalize the above transactions for the month of July (b) Prepare ledger accounts in running balance format (c) Prepare trial balance at 31 July 2020
Chuck recently purchased brand new equipment for his sign making business. He received an invoice for $3.625 dated March 22 with terms 4/10, 2/20, n/60 Chuck paid $1,225 on April 1 and $480 on April 11. What balance was still owed after April 112 Your Answer: Answer
Chulu own a retail shop. The following information is available from the few records kept for the beginning and end of 2020. 1 January 31 December K K Cash in shop till 350 250 Bank overdraft 800 300 Inventory 2,600 3,300 Owed by customers 4,500…
Give typing answer with explanation and conclusion Donna owns and operates a dress shop . In 2022, her total sales were$80,000. She refunded $950 to customers who were unsatisfied. Her cost of goods sold was $30,000 what is Donna's gross income on her schedule c, profit or loss from business (sole proprietorship)