Reference no: EM132967060

Questions - The following are independent questions:

Q1. Sun employs the cash form to disclose the revenue from its tech advising business. As a limited partner, a major public company has proposed to participate in Sun's company. If Sun and the company became partners, what tax accounting problems will be created?

Q2. Theresa, a taxpayer on an accrual basis, subscribes to a program which updates the database used in the company. For the time from January 2020 to December 2021, Theresa billed the $120,000 subscription. What's the 2020 Theresa allowance?

Q3. Emerald Dealerships sell cars. New clients are questioned on the kind of accounting they like for exclusive offers. Emerald has promised to have the first four free of charge consultations (i.e., at 3,000, 6,000, 9,000, and 12,000 miles). No matter how many consumers exercise their privileges, it is a virtual guarantee that they can use the service. The controller uses the total expenditure at the time of payment to make sure that any of the expenses that were incurred in the transaction are accounted for in the financial reports. And your supervisor will how will you answer the question?

Q4. Sara has accepted the bid on an estate that Ire has bought. Irene would have to pony up $150,000 in cash or $50,000 pledged by City Bank of New York in 6 percent installments of $ every year, and the after tax has been deducted, she will place $200,000 in six-year CD interest-bearing certificates, which will gain 6% interest per year after tax. Sara's total outlay on this project is $25,000. Why is Sara going to choose payment sales?

Q5. On January 1, 2020, a law firm was formed with the expectation of earning $25,000 per month before deducting the attorney's fee. The lawyer owns the whole stock. Both the company and the lawyer account in money. Since the firm is not required to keep the revenue, the compensation of the counsel (a current year taxpayer) would equate the corporation's net profits until salary bill. Which tax year does the company pick if it might pay the lawyer's salary at any period (but at minimum once every 12 months)? Where can the annual wage be paid?

Q6. Your customer is an industrialist. The firm abandoned emptied paint cans on its grounds for many years. The colour was applied throughout the manufacturing period. The firm was recently notified by a state environmental regulator that it was necessary to unearth the paint cans and clean up the grounds. The corporation invested a significant sum of money this year on environmental cleanup. According to an IRS agent, the expense would be attributed to the land's basis since the cleaning improved the ground. The company's chief financial officer has requested that you decide if there is any jurisdiction that will support an existing deduction for these expenses.

Q7. Diane, a cash-basis taxpayer, was compensated by his boss for a $15,000 bonus in 2020. The incentive was calculated on the basis of the company's earnings in 2019. The group found in 2021 that its 2019 earnings have been overstated. As a consequence, Diane got an extra $10,000 for earnings earned in 2019. Diane's effective tax rate was 15% in 2020 and 35% in 2021. Sharon, who is now a cash accounting taxpayer, got a $35,000 incentive contingent on 2020 earnings in 2021. The corporation found in 2021 that it had inflated its 2020 earnings. Sharon was forced to refund $10,000 of her bonuses in 2021 as a result. Sharon paid taxes at the 35% marginal rate in 2020 and at the 15% marginal rate in 2021. What preferential tax status are Diane and Sharon entitled to as a consequence of their employer's mistakes?

Q8. In 2020, your customer, Clearel Corporation, shifted the radio station's accounting from cash to accrual. The transition resulted in a favorable 481 adjustment of $2.4 million, which the organization started amortizing in 2020. In 2021, Clearel obtained a bid to buy the radio station's properties (under 1060, this will be called a selling of a trade or business). Clearel intends to acquire a satellite television company if the bid is approved. Clearel has requested that you clarify the impact of the radio station's sale on the amortization of the 481 change.

Q9. What will be the benefit of the cash system relative to the accrual basis?

Q10. In December 2020, with her company in the 2021 calendar year, Nile Inc., a taxpayer on an accumulated basis, charged an insurance fee of $12,000. How much will 2020 subtract from Nile, Inc.?

Q11. The investor was unable to utilize the cash accounting form in 2019. The accounts receivable at the start of the year totaled 240,000 dollars, the merchandise payable was 80,000 dollars and the inventory at hand amounted to 320,000 dollars. What is the shift in the accounting process of the adjustment?