Identify the concept underlying

Assignment Help Accounting Basics

Reference no: EM13972769

Consider the following two situations. Although they are similar, their treatments are exactly opposite. Identify the concept underlying both treatments, and explain why the concept treats the two situations differently.

a. Sam is an employee of Dunbar Company. The company regularly mails salary checks to employees to arrive on or before the last day of each month. Sam's regular paycheck arrives at his house on December 31, 2010, but Sam is away on a ski trip and does not return until January 2, 2011. Sam deposits the check in his bank account the following day. The check is included in Sam's 2010 income.

b. Percy is an employee of Daly Company. In November 2010, Percy's position is eliminated in a ‘‘streamlining'' of company costs. As part of the cost reduction program, Percy is entitled to severance pay; however, his boss tells him that it will be 3 or 4 months before the severance payments are made. The check arrives by mail on December 31, 2010, while Percy is away on a ski trip. He returns on January 2, 2011, and deposits the check in his bank account the following day. The severance pay check is not taxable until 2011.

Reference no: EM13972769

Questions Cloud

Prepare a 10 minute presentation on the following topic. : Using examples from post 2007 financial crisis, discuss whther lack of transparency was responsible for the failure of financial institutions?

Constructive receipt of income : Determine whether the taxpayer in each of the following situations is in constructive receipt of income. If not, explain when the income will be constructively received.

Which cost''s estimation is more time consuming : 1) Which of the following is Not a goal for any business? a) Retain customers in long run b) Gain market share c) Satisfy customers d) Price control

Calculate the payback period for each case : Ventura Manufacturing is considering an investment in a new automated manufacturing system. The new system requires an investment of $3,000,000 and either has Even cash flows of $750,000 per year or The following expected annual cash flows: $375..

Identify the concept underlying : Consider the following two situations. Although they are similar, their treatments are exactly opposite. Identify the concept underlying both treatments, and explain why the concept treats the two situations differently.

Explain communication challenges unique to groups and teams : Explain the communication challenges unique to groups and teams, especially in cross-cultural situations.

Write argument paper about economic impact of student loans : Write an argument paper about The economic impact of student loans. he topic selected must be debatable or have at least two views to be used for this assignment.

Calculating the claim of right to the income : Determine whether the taxpayer in each of the following situations has a claim of right to the income received:

Prepare the journal entry to record depreciation : Prepare the journal entry to record depreciation expense at the end of year 1, assuming the following:

User Account

All Pages