You are a CPA in practice who has just obtained a new client. Another CPA completed the tax returns for the prior three years. The client has operated his business as an S corporation during the three-year period.After starting work on this year’s tax return, you notice that the S corporation has an October 31 fiscal year-end. After examining the file, you discover that three years ago, when the S corporation adopted the fiscal tax year, a §444 election was not made. In addition, the S corporation has not maintained the proper required “minimum deposit account” with the IRS.The client wants your advice on what to do now. You determine that there are three options: (1) you can do nothing and hope the IRS does not find out, (2) you can notify the IRS of the mistake and pay any interest and penalties, or (3) you can elect a calendar year and hope the IRS does not notice the current invalid fiscal year. What potential nonregulatory ethical issues do you see in this situation that could influence your decision on any recommendation?
I am having trouble figuring out my accounts payable and capital. Any help on going about and solving this would be greatly appreciated. I have listed the data below… Travis Fortney, an architect, opened an office on April 1, 2010. During the month, he completed the following transactions connected with his professional practice: 1. Transferred cash from a personal bank account to an account to be used for the business, $30,000. 2. Purchased used automobile for $19,500, paying $4,500 cash and giving a note payable for the remainder. 3. Paid April rent for office and workroom, $3,000. 4. Paid cash for supplies, $1,450. 5. Purchased office and computer equipment on account, $6,000. 6. Paid cash for annual insurance policies on automobile and equipment, $2,000. 7. Received cash from a client for plans delivered, $7,500. 8. Paid cash to creditors on account, $1,750. 9. Paid cash for miscellaneous expenses, $500. 10. Received invoice for blueprint service, due in May, $1,000. 11. Recorded fee earned on plans delivered, payment to be received in May, $5,200. 12. Paid salary of assistant, $1,600. 13. Paid cash for miscellaneous expenses, $325. 14. Paid installment due on note payable, $250. 15. Paid gas, oil, and repairs on automobile for April, $400.
AARP reported on a study conducted to learn how long it takes individuals to prepare their federal income tax return (AARP Bulletin, April 2008). The data contained in the file named TaxReturn (located on the Online Content website from your Dashboard) are consistent with the study results. These data provide the time in hours required for 40 individuals to complete their federal income tax returns. Using past years” data, the population standard deviation can be assumed known with s = 9 hours. What is the 95% confidence interval estimate of the mean time it takes an individual to complete a federal income tax return (to 1 decimal)?
Zeta, Inc., produces handwoven rugs. Budgeted production is 5,000 rugs per month and the standard direct labor required to make each rug is 2 hours. All overhead is allocated based on direct labor hours. Zeta’s manager is interested in what caused the recent month’s $3,000 unfavorable overhead variance. The following information was available to aid in the analysis:
|Budgeted Amounts||Actual Results|
|Production in units||5,000||4,500|
|Total labor hours||10,000||9,000|
|Total variable overhead||$||60,000||$||55,000|
|Total fixed overhead||40,000||38,000|
What was the overhead spending variance for the month?
Using the general ledger accounts and balances below
please prepare a Stockholder Equity section of the
balance sheet. include all
details such as number of shares authorized, issued
and outstanding as well as par values.
The corporation has authorized 500,000 shares of $5
par common stock and 50,000 shares of $2 preferred
stock $10 par. Preferred stock has 20,000 issued and
20,000 shares outstanding.
Retained Earnings – Unappropriated $500,000
Common Stock 300,000
Treasury Stock 25,000
$2Preferred Stock 200,000
Paid in Capital – Treasury Stock 10,000
Paid in Capital – Common Stock 2,000,000
Paid in Capital – Preferred Stock 1,000,000
If the balance in the Common stock account is
$300,000 and the par value is $5. How many shares
have been issued? If there are 2,000 shares of
common in the treasury. How many shares are
21. Convert the nominal returns on both large and small stocks to real rates. Reproduce Table 5.5 using real rates instead of excess returns. Compare the results to those of Table 5.5.
22. Repeat Problem 28 for small stocks and compare with the results for nominal rates.
You are the auditor for a company and need to review the company’s accounts receivable using probability proportional to size (PPS) sampling. In addition, the board of directors has requested that you and your team present an explanation of your PPS process at its next monthly meeting.
Use the following company data and the PPS Sampling Tables 1 & 2:
- The recorded book value of these accounts is $3,460,000.
- The company has a tolerable error of $63,460.
- The anticipated error is $13,000.
- The risk of incorrect acceptance is 5%.
- The acceptable number of overstatements of misstatements is 2.
Use probability proportional to size (PPS) sampling to do the following:
- Determine the reliability factor.
- Determine the correct expansion factor.
- Determine the sample size you should use.
- Determine the sampling interval you should use.
home / homework help / questions and answers / business / accounting / when should a company disclose extraordinary items …Question
When should a company disclose extraordinary items on their income statement? Why do you think that this disclosure is made after income from operations on the income statement?
An extraordinary item is an event which is not related to ordinary activity of the company.It is unlikely to recur in the forseeable future.It is an abnormal event. E.g are Effects of a strike, Abandonment of property, Intangible assets. Company should disclose extraordinary item if it is material. Materiality is considered in relation to Income before extraordinary items, trend of annual earnings before extraordinary items etc. It is disclosed after income from operations because it is not a part of normal activities of company. Purpose of making such a disclosure is to present a true and fair view i.e. the users of financial statemnets can analyse the items which are totally unrelated to the operational and Financial results of the business. Extraordinary items should be presented separately, and after the results of ordinary operations in the income statement, along with disclosure of the nature of the items, and net of related income taxes.
CircuitTown commenced a gift card program in January 2011 and sold $12,000 of gift cards in January, $14,000 in February, and $15,000 in March of 2011 before discontinuing further gift card sales. During 2011, gift card redemptions were $7,000 for the January gift cards sold, $4,500 for the February cards, and $5,000 for the March cards. CircuitTown considers gift cards to be “broken” (not redeemable) 10 months after sale. (For purposes of this question, assume that gift-card sales occur halfway through each month on average.) 1.How much revenue will CircuitTown recognize with respect to March gift card sales during 2011? 2. What liability for unearned revenue associated with gift card sales would CircuitTown show as of December 31, 2011?
CircuitTown commenced a gift card program in January 2011 and sold $12,000 of gift cards in January, $14,000 in February, and $15,000 in March of 2011 before discontinuing further gift card sales. During 2011, gift card redemptions were $7,000 for the January gift cards sold, $4,500 for the February cards, and $5,000 for the March cards. CircuitTown considers gift cards to be “broken” (not redeemable) 10 months after sale. (For purposes of this question, assume that gift-card sales occur halfway through each month on average.)?1.How much revenue will CircuitTown recognize with respect to March gift card sales during 2011? ?2. What liability for unearned revenue associated with gift card sales would CircuitTown show as of December 31, 2011?
TCO D) Green Co. pays a weekly payroll of $100,000 that includes federal taxes withheld of $40,500, FICA taxes withheld of $22,000, and 401(k) withholdings of $25,500. What is the effect of assets and liabilities from this transaction? (Points : 5) Assets decrease $100,000 and liabilities do not change Assets decrease $12,000 and liabilities increase $12,000 Assets increase $88,000 and liabilities increase $12,000. Assets decrease $12,000 and liabilities increase $88,000. 5. (TCO D) Which of the following is generally associated with payables classified as accounts payable? Periodic Payment Secured Of Interest by Collateral a. No No b. No Yes c. Yes No d. Yes Yes (Points : 5) a b c d need in 10 minates
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