Reference no: EM132951574
In order to supplement his income working in a craft store, Mr. John Collins has decided to start a home-based business that will specialize in selling used vintage records. Mr. Collins has always been passionate about music.
- The business will be run out of space that he has set aside in his residence. This space involves 25 percent of the total floor space in the residence.
- The residence was acquired on January 1, 2017 at a total cost of $345,000. It is estimated that $95,000 of this total value can be attributed to the land on which the residence is situated.
For the year ending December 31, 2018, Mr. Collins has the following costs that can be associated with this residence:
Utilities for Home (Heat, Light, And Water) $2580
Mortgage Interest Paid $8410
House Insurance $600
Property Taxes $3800
Repairs and Maintenance for Home $3100
Total $18,490
The business begins operations on March 1, 2018. On that date, Mr. Collins acquires the following assets to be used in his new business:
Office Furniture and Storage Racks $12,000
Computer $1650
Accounting Software $750
- In addition, he has a separate telephone line installed for dealing exclusively with the mail order business. The telephone charge includes charges for a toll-free number and a long-distance package.
During the period March 1, 2018 through December 31, 2018, his mail order sales total $118,000. Costs associated with these sales are as follows:
Cost of Merchandise Sold$64,000
Unsold Merchandise (Lower of Cost and Market)$11,500
Packaging Materials$3600
Shipping Costs$5800
Miscellaneous Office Supplies$660
Telephone (Total Charge for The Period)$1350
Printing of Posters and Brochures Distributed$680
Required:
Problem 1: Can Mr. Collins deduct workspace in the home costs? Briefly explain your conclusion.
Problem 2: Compute the minimum net business income or loss that Mr. Collins must report in his 2018 personal income tax return.
|
What types of documents typically included in commencement
: What types of documents are typically included in the commencement package? Organization- specific forms such as personal information forms
|
|
How much loss will Sherri carry
: For 2020, Sherri has a short-term loss of $2,500 and a long-term loss of $4,750. How much loss will Sherri carry over to 2021
|
|
Maintain the current spread
: To protect against interest rate changes when rolling over the loan in 6 months, the bank decides to hedge using a forward rate agreement (FRA).
|
|
What is the present value of an investment
: Your friend, Mike Szyslak wants be a millionaire, and he found several ways applicable. But he is still hesitating among the various options and comes to you fo
|
|
Compute the minimum net business income or loss
: In order to supplement his income working, Compute the minimum net business income or loss that Mr. Collins must report in his 2018 personal income tax return.
|
|
Calculate the total cost for the cakes
: Determine the amount of over- or- under applied overhead for each department? Calculate the total cost for the cakes
|
|
What is the project irr
: XYZ Corp. is considering a project that has the following cash flow data. What is the project's IRR? Note that a project's IRR can be less than the WACC or nega
|
|
Determine the issue debt or equity instruments
: One of services provided Investment Bank give advice to firms when securities should be offered, and it also give advice should raise capital by selling stocks
|
|
Prepare a partial balance sheet at December
: Prepare a partial balance sheet at December 31, 2019 showing accounts receivable, allowance for doubtful accounts, and the net accounts receivable
|