Reference no: EM131256776
Partner Q is a partner in Partnership QRST. The partnership agreement states that Q's share of income and losses is 30 percent. Q provides services to QRST. Both QRST and Q use a calendar year for tax purposes. The partnership's financial records for the current year show:
Gross pro?t . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $260,000
Guaranteed payments to Q. . . . . . . . . . . . . . . . . . (20,000)
Life insurance premium for Q . . . . . . . . . . . . . . . . . (500)
Operating expenses . . . . . . . . . . . . . . . . . . . . . . . (60,000)
Charitable contributions. . . . . . . . . . . . . . . . . . . . . (9,000)
Net long-term capital gain. . . . . . . . . . . . . . . . . . . 10,000
Q is single, has no other income, and no itemized deductions for the year. Q received the $20,000 guaranteed payments and withdrew an additional $10,000 during the year. Q's capital account in the partnership was $50,000 at the beginning of the year.
Using Form 1065, page 1 as a guide; calculate QRST's ordinary income for the tax year.
Calculate Q's taxable income for the tax year of 2012. Q will not be able to itemize deductions.
Calculate Q's capital account in the partnership at the end of the tax year.
|
Prepare an unadjusted trial balance at the end of february
: Barbara Jones opened Barb’s Book Business on February 1. Received shareholders’ cash contributions on February 1 totaling $23,000 to form the corporation; issued 1,000 shares of common stock. You have been hired to maintain the company’s financial re..
|
|
Determine price at which builders is selling the warehouse
: On June 30, 2016, Georgia-Atlantic, Inc., leased a warehouse facility from Builders, Inc. The lease agreement calls for Georgia-Atlantic to make semiannual lease payments of $583,573 over a 4-year lease term, payable each June 30 and December 31, wit..
|
|
What pretax amounts related to lease
: On June 30, 2016, Georgia-Atlantic, Inc., leased a warehouse facility from IC Leasing Corporation. The lease agreement calls for Georgia-Atlantic to make semiannual lease payments of $559,700 over a four-year lease term, payable each June 30 and Dece..
|
|
What tax rate would he be indifferent between the bonds
: Mitch is currently considering investing in municipal bonds that earn 8.40 percent interest, or in taxablebonds issued by the coca cola company that pay 11.2 percent. At what tax rate would he be indifferent between the bonds?
|
|
Capital account in partnership at the end of the tax year
: Partner Q is a partner in Partnership QRST. The partnership agreement states that Q's share of income and losses is 30 percent. Q provides services to QRST. Both QRST and Q use a calendar year for tax purposes. Calculate Q's taxable income for the ta..
|
|
Should the advertising budget be increased
: The marketing manager argues that a $9,500 increase in the monthly advertising budget would increase monthly sales by $22,500. Calculate the increase or decrease in net operating income. Should the advertising budget be increased?
|
|
What pretax amounts related to the lease
: On June 30, 2016, Georgia-Atlantic, Inc., leased a warehouse facility from IC Leasing Corporation. The lease agreement calls for Georgia-Atlantic to make semiannual lease payments of $463,866 over a four-year lease term, payable each June 30 and Dece..
|
|
The payment of interest and the related amortization
: McGee Company issued $400,000 of 8%, 20-year bonds on January 1, 2014, . Interest is payable semiannually on July 1 and January 1. McGee Company uses the effective interest method of amortization for bond premium or discount. Assume an effective yiel..
|
|
Prepare cook company journal entries related to the lease
: On January 1, 2016, Cook Textiles leased a building with two acres of land from Peck Development. The lease is for 10 years at which time Cook has an option to purchase the property for $130,000. The building has an estimated life of 20 years with a ..
|