Blaze operates a restaurant in Cleveland. He travels to Columbus to investi-

Blaze operates a restaurant in Cleveland. He travels to Columbus to investi- gate acquiring a business. He incurs expenses as follows: $1,500 for travel, $2,000 for legal advice, and $3,500 for a market analysis. Based on the different tax consequences listed below, describe the circumstances that were involved in Blaze’s investigation of the business. a. Blaze deducts the $7,000 of expenses. b. Blaze cannot deduct any of the $7,000 of expenses. c. Blaze deducts $5,000 of the expenses and amortizes the $2,000 balance over a period of 180 months.

2 months ago

Solution 1

Guest Guest #1628129
2 months ago

Answer: The following assumptions will be made as per the tax laws

Explanation:

1. As the expenditure made by blaze was to enquire about the business operation similar to his, therefore the expenditure is eligible for deduction.

2. If Blaze would not be inquiring about a restaurant or would also not acquire it later. Then the expenditure would not be eligible for deduction.

3. If Blaze would not have been in the restaurant business but eventually purchases the business he was inquiring about then he can claim $5000 expenses before and the $2000 deduction later.

📚 Related Questions

Question
At the end of the year, a company reports a balance in its Allowance for Uncollectible Accounts of $1,900 (credit) before any year-end adjustment. The company estimates future uncollectible accounts to be 2% of credit sales for the year. Credit sales for the year total $283,000. Record the adjustment for the allowance for uncollectible accounts using the percentage-of-credit-sales method. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
Solution 1

Answer:

  • Initial Balance  

Accounts Receivable $ 283,000  

Allowance for Uncollectible Accounts  $ 1,900

  • Journal Entry

Bad debt expense  $ 3,760  

Allowance for Uncollectible Accounts  $ 3,760

  • Final Balance  

Accounts Receivable $ 283,000  

Allowance for Uncollectible Accounts  $ 5,660

Explanation:

Accounts Uncollectible are those credit that the company give and there are not chances of been collected.

When the customers buy products on credits but then the company can't collect the debt, then it's necessary  to write off the unpaid bill as uncollectible

One way it's to write-off directly the bad debts at the moment decided that the credit are uncollectible, the total amount  it's reported as bad debt expenses which affect negativly the income statement and the accounts receivable are reduce in the same amount, less assets.

The other way it's to determine a percentage of total amount of accounts receivables as uncollectible, exist many ways to analize the accounts receivable and figure the value of uncollectible.

When the company have the percentage of uncollectible accounts the journal entry required is Bad Expenses (debit) with Allowance for Uncollectible Accounts (credit)

At the moment of the write-off as the expenses were before recognized we only use the Allowance for Uncollectible Accounts (Debit) with Accounts Receivable (Credit), with this we are recognizing the uncollectible credit of the company.

Question
It is week 1 and there are currently 20 As in stock. We need 300 As at the start of week 5. If there are scheduled receipts planned for week 3 and week 4 of 120 As each and A has a lead time of 1​ week, when and how large of an order should be placed to meet the requirement of 300​ As?
Solution 1

Answer:

An order of 40As should be placed to meet the requirement of 300​ As at Week 4

Explanation:

Given

Current Week: Week 1

Stock: 20 As

End Week: Week 5

Stock: 30 As

Activities within the week are as follows:

In the question, there's no planned receipt for week 2;

So, the data entry for week 2 is

Week 2:

Stock: 0 As

There are scheduled receipts planned for week 3 and week 4 of 120 As each;

Week 3:

Stock: 120 As

Week 4:

Stock: 120 As

Since the End week is week 5 and at this point there are (20 + 0 + 120 + 120) As in stock;

To balance the stock, there's a need for 300 As - (20 + 0 + 120 + 120) As

= 40 As.

So, Week 5 Entry is as follows;

Week 5:

Stock: 50 As

Tabulate the above findings in a table;

Week         Quantity        Accumulated Quantity

  1                    20                          20

  2                      0                          20

  3                  120                          140

  4                  120                         260

  5                   40                         300

The Accumulated Quantity stands as the cumulative frequency of the table.

It is stated that, the expectant week is week 5 and there's a lead time of 1 week.

So, the order should be placed at

Week (5 - 1)

The order should be placed at week 4

The Size of order to be placed = Total Requirement - Accumulated Quantity at Week 4

Size of order to be placed = 300 - 260

Size of order to be placed = 40.

Conclusively, an order of 40As should be placed to meet the requirement of 300​ As at Week 4

Solution 2

Answer:

40 units at the start of week 4

Explanation:

Week         Quantity        Accumulated Quantity

   1                    20                          20

   2                      0                          20

   3                  120                          140

   4                  120                         260   --->  Order by 40 units *

   5                   40 *                       300          

* 40 units, received in week 5, from order placed 1 week before ( week 4 )

Question
Joe Downey is currently 65 years of age. He is currently drawing $20,000 a year out of his IRA. He expects to live to 100 and wants to know what he needs now to insure himself that he will be able to draw the $20,000 at the beginning of each year for the next 35 years. He believes the account will earn 6 percent compounded annually for the next 35 years. How much money does he need in his account today?
Solution 1

Answer:

$307,382.82

Explanation:

current age = 65 years

Requires $20,000 at the beginning of the year for the next 35 years.

interest rate = 6%

So, initial investment = PV of all the inflows

= $20,000+ 20,000×PV×( 6%, 35% years)

=$20,000+ 20,000×14.3681

= $20,000+ 287,362.82= $307,382.82

So, he must invest $307,382.82 to get $20,000 every year.

Question
Item9 5 points eBook ReferencesItem 9Item 9 5 points Item Skipped Determine whether each of the following statements is positive or normative. (Remember that a positive statement isn’t necessarily correct; it just makes a factual claim rather than a moral judgment.) a. People who pay their bills on time are less likely than others to get into debt: . b. Hard work is a virtue: . c. Everyone should pay his or her bills on time: . d. China has a bigger population than any other country in the world: . e. China’s One-Child Policy (which limits families to one child each) helped to spur the country’s rapid economic growth: . f. Lower taxes are good for the country: .
Solution 1

Answer:

Positive statement is defined as the statement which are fact based and tells us the reality and these statements can be tested, amended or rejected on behalf of the evidence.

Normative statement is defined as the statements which includes suggestions or opinions that can be tested by observing the evidence. These are the subjective statements.

(a) Positive statement

(b) Normative Statement

(c) Normative Statement

(d)  Positive statement

(e)  Positive statement

(f) Normative statement

Question
Assume there are two industries in our​ economy: the production of pizza and the production of calzones. Each of these products is produced in a similar way with similar ingredients and requires similar skills. If the market price of pizza in this competitive market is below the ATC curve and the price of calzones is above the ATC​ curve, ____________. A. firms currently making pizza will switch to making calzones. B. firms will continue making their current product since demand curves will adjust to equilibrate prices in both markets. C. firms will increase their productivity to lower their marginal costs. D. firms currently making calzones will switch to making pizza.
Solution 1

Answer:

A. firms currently making pizza will switch to making calzones

Explanation:

Question
Spring Street Engine Shop uses a job order cost system to determine the cost of performing engine repair work. Estimated costs and expenses for the coming period are as follows: Engine parts $ 875,000 Shop direct labor 660,000 Shop and repair equipment depreciation 44,500 Shop supervisor salaries 138,000 Shop property taxes 27,500 Shop supplies 10,000 Advertising expense 22,100 Administrative office salaries 73,500 Administrative office depreciation expense 8,600 Total costs and expenses $1,859,200 The average shop direct labor rate is $30 per hour. Determine the predetermined shop overhead rate per direct labor hour.
Solution 1

Answer:

The predetermined shop overhead rate per direct labor hour is $10

Explanation:

The formula to compute the predetermined shop overhead rate per direct labor hour is shown below:

Predetermined shop overhead rate = (Total shop overhead cost) ÷ (direct labor hours)

where,

Total shop overhead cost =  Shop and repair equipment depreciation + Shop supervisor salaries + Shop property taxes + Shop supplies

= $44,500 + $138,000 + $27,500 + $10,000

= $220,000

And, the Direct labor hours = (Shop direct labor) ÷ (average shop direct labor rate)

= 660,000 ÷ $30

= 22,000 hours

Now put these values to the above formula  

So, the rate would equal to

= $220,000 ÷ 22,000 hours

= $10

Question
Nikole watched a movie called Blackfish about the poor conditions of killer whales in captivity. A month later she was in San Diego and had the opportunity to go to SeaWorld for a day. Remembering what she saw from the movie, she opted not to go as a protest of their treatment of the whales. Nikole experienced how marketing can:
Solution 1

Answer:

maybe affect decisions she makes in daily life

Explanation:

Solution 2

Answer: can affect an individual's decision on things.

Explanation: The movie's portrayal about the poor conditions of killer whales in captivitity helped to shape the way Nikole feels and reasons. The movie is a marketing strategy that seeks for animals like killer sharks be treated and placed in better conditions that would make people want to visit them all the time. Its game plan is to discourage people from visiting, encouraging and indulging the captivity of animals. By portraying the killer whales in poor conditions, it has affected the way Nikole thinks and feels about their living conditions.

Question
The following information was taken from the bank reconciliation for Mooner Sooner Inc. at the end of the year: Bank balance: $8,000 Checks outstanding: $5,800 Note collected by the bank: $1,500 Service fee: $20 Deposits outstanding: $4,000 NSF check (bad check) returned for $300 What is the correct cash balance that should be reported in Mooner Sooner's balance sheet at the end of the year? Select one:
Solution 1

Answer: The correct answer is $ 6200.

Explanation: We must start from the $ 8000 bank balance, to which we will add the outstanding deposits of $ 4000 and finally we will subtract the $ 5800 to arrive at the correct cash balance in the Mooner Sooner balance at the end of the year.

Therefore 8000 + 4000 - 5800 = $ 6200.

Question
Pure Action Cycles Inc., a bicycle manufacturer, has a net capital loss in 2018 of $(70,000). It had net capital gains of $22,100 in 2017, $48,000 in 2016, $10,600 in 2015 (but suffered a net operating loss in 2015), and $8,600 of net capital gain in 2014. What is the net capital gain in 2017 after the carryback is applied?
Solution 1

Answer:

Remaining capital gain in 2017 is $100

Explanation:

given data

net capital loss in 2018 = $70,000

net capital gains in 2017 = $22,100

net capital gains in 2016 = $48,000

net capital gains in 2015 = $10,600

net capital gains in 2014 = $8,600

to find out

net capital gain in 2017

solution

we know that here that the net capital loss can only be carried back three years

so It cannot be applied to the net capital gain in 2016 either because the corporation suffered a net operating loss that year

so here we have given  

Net capital gain offset in 2016 is $48,000

so Remaining capital loss carry back is = net capital loss in 2018 - Net capital gain offset in 2016

Remaining capital loss carry back is = 70,000 - 48,000 = $22000

so

here net capital gain in 2017 is $22,100

Remaining capital gain in 2017 = net capital gain in 2017 - Remaining capital loss carry back 2016

Remaining capital gain in 2017 = 22,100 - 22000

Remaining capital gain in 2017 is $100

Question
Raclette is a popular wintertime dish in Switzerland. It is essentially melted Raclette cheese over boiled new potatoes. If the price of Raclette cheese decreased, we would expect to see: an increase in demand for Raclette cheese. an increase in demand for new potatoes. no effect on the demand for either of the Raclette ingredients since this is a traditional dish and its consumption does not depend on the prices of the ingredients. an increase in demand for both Raclette cheese and new potatoes.
Solution 1

Answer:

Option (b) is correct.

Explanation:

Raclette is a popular wintertime dish in Switzerland. Both Raclette cheese and boiled new potatoes are used together to make Raclette.

Therefore, Raclette cheese and boiled new potatoes are complimentary goods because both are used together to satisfy a given want.

In case of complimentary goods, there is an inverse relationship between the price of a good and demand for its complimentary good.

Hence, if there is a decrease in the price of Raclette cheese then as a result  the demand for new potatoes increases.

So, the correct option is (b).