[The following information applies to the questions displayed below.] Nancy operates a business that uses the accrual method of accounting. In December, Nancy asked her brother, Hank, to provide her business with consulting advice. Hank billed Nancy for $5,000 of consulting services in year O (a reasonable amount), but Nancy was only able to pay $3,000 of the bill by the end of this year. However, Nancy paid the remainder of the bill in the following year. How much of the $5,000 consulting services will Hank include in his income this year if he uses the accrual method of accounting? hat amount can Nancy deduct this year for the consulting services?
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- ASLEY is in the business of purchasing accounts receivable from businesses at a discount and then collecting them. Last year, she purchased a $30,000 account receivable for $25,000. This year, the account was settled for $25,000. How much loss can Peggy deduct and in which year? a.$5,000 for the prior year. b.$5,000 for the prior year and $5,000 for the current year. c.$5,000 for the current year. d.$-0- for the current year.! Required information [The following information applies to the questions displayed below.] In January of year 0, Justin paid $5,400 for an insurance policy that covers his business property for accidents and casualties. Justin is a calendar-year taxpayer who uses the cash method of accounting. What amount of the insurance premium may Justin deduct in year O in each of the following alternative scenarios? (Leave no answers blank. Enter zero if applicable.) a. The policy covers the business property from April 1 of year 0 through March 31 of year 1. Deductible amountBy using the information below, please help me with questions 1 through 6. PLEASE EXPLAIN THOROUGHLY FOR A BETTER UNDERSTANDING THANK YOU!! PLEASE ASSIST ME WITH THE FOLLOWING 6 QUESTIONS USING THE PROVIDED INFORMATION BELOW. THANK YOU! Lillian and Jackson Clark are a married couple in their early 20s living in Los Angeles. Jackson Clark earned $93,000 in 2018 from his sales job. During the year, his employer withheld $11,685 for income tax purposes. In addition, the Clarks received interest of $350 on a joint savings account, $750 interest on tax-exempt municipal bonds and dividends of $400 on common stocks. At the end of 2018, the Clarks sold two stocks, A and B. Stock A was sold for $700 and had been purchased four months earlier for $800. Stock B was sold for $1,500 and had been purchased 3 years earlier for $1,100. Although his company's pension plan covers Jackson, he plans to contribute $5,500 to a traditional deductible IRA for 2018. Their only child, Carter, age 2, received…
- George's long-time client, Henrietta, brought in business records this year showing $40,000 of business income and $30,000 of related expenses. In prior years, her expenses have been closer to $10,000. Which of the following should George do to ensure that he complies with his Circular 230 duty of due diligence as to accuracy? Refuse to prepare the return unless Henrietta can provide receipts for each individual expense. Review the records Henrietta provided to see if they adequately explain the sharp increase in expenses. If he has any remaining questions, he should ask Henrietta to explain. Independently investigate by calling a random sample of the vendors listed to verify that Henrietta really paid the amounts claimed. Prepare Henrietta's return using the expenses listed on the prior-year return.Beth operates a plumbing firm. In August of last year she signed a contract to provide plumbing services for a renovation. Beth began the work that August and finished the work in December of last year. However, Beth didn't bill the client until January of this year and she didn't receive the payment until March when she received payment in full. When should Beth recognize income under the CASH method of accounting?Ginny is an accountant by trade, she paid $1,000 each year to join as CPA member. She also has a knack for programming; hence she also joins the Computer Associates membership for $500 per year as she planned to find a new career as a programmer. Discuss her eligibility whether she can deduct both membership fees from her assessable income! please put 3 references
- Diana and Ryan Workman were married on January 1 of last year. Ryan has an eight-year-old son, Jorge, from his previous marriage. Diana works as a computer programmer at Datafile Incorporated (DI) earning a salary of $96,000. Ryan is self- employed and runs a day care center. The Workmans reported the following financial information pertaining to their activities during the current year. a. Diana earned a $96,000 salary for the year. b. Diana borrowed $12,000 from Dl to purchase a car. DI charged her 2 percent interest ($240) on the loan, which Diana paid on December 31. DI would have charged Diana $720 if interest had been calculated at the applicable federal interest rate Assume that tax avoidance was not a motive for the loan. c. Ryan received $2,000 in alimony and $4,500 in child support payments from his former spouse. They divorced in 2016. d. Ryan won a $900 cash prize at his church-sponsored Bingo game. e. The Workmans received $500 of interest from corporate bonds and $250 of…Sam owns an insurance agency and makes the following business gifts during the year. Calculate Sam's deduction for business gifts. If an amount is zero, enter "0". Donee Amount Amount Allowed 1. Ms. Sears (a client) $35, plus $4 shipping $ 2. Mr. Williams (a tennis partner, not a business prospect or client) 55 3. Mr. Sample (a client) and Mrs. Sample (nonclient wife of Mr. Sample) 22 20 4. Various customers (calendars costing $3 each with the company name on them) 300 5. Mr. Shiver (an employee gift, a watch, for 25 years of continuous service) 175 Total business gift deductionGrace is a self-employed sales consultant who spends significant time entertaining potential customers. She keeps all the appropriate records to substantiate her entertainment. She has the following expenses in the current year: Restaurant meals where business was conducted $5,000 Greens fees (all business) 500 Tickets to baseball games (all business)500 Country Club dues (all business use)6,000 What are the tax-deductible meals and entertainment expenses Grace may claim in the current year?