An accrual basis taxpayer

Reference no: EM13332137

For each of the following independent situations, state which concept(s) is (are) responsible for the treatment and EXPLAIN how each concept is applied.
1. 1. Alabama Construction, Inc., an accrual basis taxpayer, billed a client in December 2014 $12,000 for services performed. In March 2015, the corporation received a check from the client for $10,000. Included with the check was a letter stating that some of the services were not performed correctly. After investigating the matter, Alabama Construction agreed that the customer was correct. Alabama Construction must include $12,000 in its 2014 income, but will take a deduction of $2,000 in 2015.
2. 5. Nebraska Corporation receives a $12,000 bill for legal fees from its attorney in December 2014. The corporation paid the bill promptly and deducted the $12,000 as a legal expense in 2014. During the audit of its financial statements, the auditor determines that the attorney had double billed the corporation for $3,000 of expenses. The attorney agrees with the auditor and sends Nebraska a check for $3,000 in April. Nebraska must recognize $3,000 of income in 2015.

Reference no: EM13332137

Questions Cloud

Write a program to simulate the behavior of the philosophers : Write a program to simulate the behavior of the philosophers, where each philosopher is a thread and the chopsticks are shared objects.

What is the size of the equal installments : A loan of $7000 taken out two years ago is to be repaid in three equal installments due now, two years from now, and three years from now respectively. What is the size of the equal installments if interest on the debt is 12% compounded monthly?

The topic is managerial accounting : The topic is managerial accounting / cost accounting.

How to evaluate the molar concentration of mg2+ : A 200.0-mL sample of the same tap water required 47.86 mL of the standard EDTA for titration at pH 10 using calmagite indicator. Calculate the molar concentration of Mg2+ in the tap water.

An accrual basis taxpayer : For each of the following independent situations, state which concept(s) is (are) responsible for the treatment and EXPLAIN how each concept is applied.

Evaluate the concentration of each gas in moles : Dry air near sea level has the following composition by volume: N2, 78.08 percent; O2, 20.94 percent; Ar, 0.93 percent; CO2, 0.05 percent. The atmospheric pressure is 1.00 atm. Calculate the concentration of each gas in moles per liter at 0°C.

Explain what is the molarity of the new solution : If 500 cc (cubic centimeters) of 2.0 M KOH are diluted with water to a volume of 1.000 cc, what is the molarity of the new solution

Appraise the project using npv approach : Pine & Oak have spent €20,000 researching the prospects for a new range of products. If it were decided that production is to go ahead an investment of €240,000 in capital equipment will be required. The accounts department has produced budget..

Project report on customer relationship management : You can make a project report on Customer Relationship Management of Talwar Hyundai consisting of using qualitative methodology ( survey and research method)

User Account

All Pages