She is considering selling her photography equipment and taking up painting.
Q: Subject AFAR
A: 57) As per the percentage completion method the entity recognized contract revenue based on the rati...
Q: The answer is 265,000. Please help me find the solution.
A: Formula: Raw material Consumed= Opening RM+ Purchases including freight- Ending RM
Q: Consider our requirement to provide ‘true’ accounting information (the ‘true and fair’ requirement)....
A: A cash flow hedge is a method used by the investor in order to offset the risks of cash flow with an...
Q: On January 1, 2030, A, B and C formed ABC Partnership with original capital contribution of P600,000...
A: Step 1 Closing Capital = Opening Capital + Additional Capital Introduced Net Profit Earned During Th...
Q: How do I do this question?
A: The Financial Statement of 2019 and 2020 is given. Required 1. Cash Flow Statement 2. Discuss the ...
Q: Cassowary Corporation acquired a 70% interest in Fruit Corporation in 1999 at a time when Fruit's bo...
A: The inter company profits on consolidation would be eliminated and would be only realized when it is...
Q: You noted the following composition of BBBCompany’s “cash account” as of December 31, 2020: Demand d...
A: Cash and Cash equivalents : It is considered as the most liquid current asset in the balance s...
Q: 49.Total debits and total credits in selected accounts of MMM Company, after closing entries were p...
A: Cost of goods sold are the total cost on the goods which are sold during the year or in other words,...
Q: When the auditor has assessed control risk of a particular area at a reduced level, he or she will t...
A: The question is multiple choice question. Required Choose the Correct Option.
Q: 45.Choi Myung-hee Company had 180,000 units of Product A on hand at January 1, 2020 costing P20 each...
A: FIFO stands for First-In, First-Out is the method of inventory which assumes that the oldest invento...
Q: On January 4, 2021, the Franc Company purchased for P27,000 a patent that had been filed eight years...
A: Solution: Journal entries of Company F for 2021 and 2022. For 2021: Date Particulars Debit Credi...
Q: Muscat Inc. has been manufacturing its own Camera for its Mobile Phone. The company is currently ope...
A: Working:
Q: On December 31, 2030, the Statement of Financial Position of ABC Partnership provided the following ...
A: Given: To calculate the share A of the asset impairment as,
Q: EA.8. Supplies were purchased on January 1, to be used throughout the year, in the amount of $8,500....
A: Adjustments are made at the year end to prepare the error free financial statements.
Q: A comparative balance sheet for Sunland Corporation is presented as follows. December 31 ...
A: Cash flow statement shows the affect on cash and cash equivalent from the changes in balance sheet b...
Q: 18. OOO and UUU are partners who share profits and losses equally. The capital accounts of the partn...
A: Partnership refers to a formal mutual arrangement happened between two or more parties who have agre...
Q: Muscat Inc. has been manufacturing its own Camera for its Mobile Phone. The company is currently ope...
A: When business has alternatives of both make or buy, means business can manufacture the product or it...
Q: construct the following financial statements on each sheets provided- income statement statement of...
A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and s...
Q: ing on Job NO. B12 during the period and incurred overhead costs totaling OMR 2,100,000. The estimat...
A: Overheads are the costs incurred by the business in the day to day operations but cost is not specif...
Q: Materials P 1,400,000 Advance for materials ordered 200,000 Goods in process 650,000 Unexpired insur...
A: Inventories are the resources of the entity which can be available in finished or intermediate form ...
Q: On January 1, 2016, Omega Company has 16,000 units in its beginning inventory. During the year, the ...
A: Given, Beginning Inventory = 16,000 unit Variable Cost = P6 per unit Fixed Cost = P4 per unit
Q: COMPASSION Company incurred the following costs at the beginning of the current year: Cost of la...
A: Tangible assets can be defined as the asset that has a monetary value and has a physical form. These...
Q: AAA Corporation's checkbook balance on December 31, 2020, was P800,000. In addition, AAA held the fo...
A: The bank reconciliation statement helps to match the balance as per cash book and bank book.
Q: Cash priority program: On Nov. 10, 2016, De Guzman, Seechua, and Longalong, partners had capital acc...
A: Given: Capital De Guzman ₱20,000 Capital Seechua ₱25,000 Capital Longalong ₱9,000 Profits or l...
Q: ABC acquired 80% interest in STU in 2021 at a time when STUƯ's book values and fair values were equa...
A: The consolidated Financial statement is prepared by those companies who hold subsidiaries.
Q: statement of financial position only
A: The account information is given Required Statement of Financial Position
Q: Instructions : Q. 1 Journalize the transactions shown above. Q. 2 Post to the ledger and display the...
A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question...
Q: B. Only
A: Ledger: Account transactions are recorded in a collection of accounts. This collection of accounts i...
Q: Roberto Orcajada and Ryan Morales are partners who share profits and losses equally. The credit bala...
A: Partnership:- When two or more persons join together to form a business and share profit or loss in ...
Q: Discuss any data integrity, internal control and reporting concerns associated with XBRL
A: Data integrity states to the validity as well as accuracy of the data over its lifecycle. In short, ...
Q: What are the proper entries for each question?
A: The question is related to Intangible Assets. Required a. Entries to record purchase of patent X an...
Q: 8. If a corporation reissued at P200 per share 100 shares of treasury stock that it had previously a...
A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question s...
Q: I need an answer for number 3, please, thank you!
A: Solution: 1) Statememt Showing Comparision for Buy or Made Component: Particular Amount $ ...
Q: What are the recommendation of an investment center manager if the company will use the method of re...
A: Rate of investment :money is a metric that's wide wont to live the likelihood of gaining a come bac...
Q: In connection with the examination of financial statements by applying PSA 240 & 300, an indepen...
A: Auditor: A person authorized to verify & review the accuracy of financial statements. & To c...
Q: I need an answer to this, please. Thank you!
A: Make or buy decision is a part of management accounting in which the total cost of buying the produc...
Q: 48.The following quarterly cost data have been accumulated for Jeokha Mfg. Inc. Raw materials – beg...
A: In FIFO method, the oldest inventory in the business house is sold first and the latest inventory is...
Q: I need an answer for number 2, please, thank you!
A: Relevant cost refers to that cost which is relevant for choosing the best alternative whereas irrele...
Q: B.
A: A journal entry is a form of accounting entry that is used to report a business transaction in a com...
Q: On January 1, 2021, ABC purchased 90% of the outstanding shares of PQR by paying P740,000. On that d...
A: Working note -1 Calculation of profit on sale of fixed assets from ABC to PQR- ...
Q: ABC Corp owns 60% of the outstanding shares of GHI Company, which it purchased for P42,000 above und...
A: In Accounting terms minority interest is that portion of the subsidiary’s shares that is not owned b...
Q: On December 31, 2030, the Statement of Financial Position of ABC Partnership provided the following ...
A:
Q: Niño is very much interested in buying Jasper’s business, but Jasper is not open to the idea of sell...
A: Any action taken as a result of a threat is invalid.
Q: Problem 11-6 (IAA) Extreme Company showed the following information: Total cost Unit cost Units 40. ...
A: The raw materials and the commodities held by the organization for using them in the production proc...
Q: J.Moon has the following transactions at for the month of June 2020. June 1 Started business with £2...
A: General ledgers refer to the accounts prepared by an entity for a particular person or item to get t...
Q: On January 1, 2021, ABC purchased 90% of the outstanding shares of PQR by paying P740,000. On that d...
A: In a consolidated financial statement, the inter-group transactions and unrealized gains on these tr...
Q: Prepare income statement and financial position from following:Show all workings
A: It will be recorded in following steps.
Q: Muscat Company has a beginning and ending work in process inventories of OMR 130,000 and OMR 145,000...
A:
Q: Answer is 5,000,000 Please help me with the solutions
A: Cost of land = P12,000,000 Additional cost = P3,000,000 Total cost = P15,000,000
Q: The following costs are provided by Chess business regarding the production of 5,000 school bags for...
A: Absorption costing method considers the production or manufacturing cost in computation of product c...
Jo, a lawyer, took a voluntary redundancy from her full-time position at a law firm. She had done some photography when she was younger and decided to engage an architect to build her a dark room in her house.
The dark room was completed at a cost of $55,000, equipped with all of the equipment that she needed to take her photography further. Jo advertised her services in the local newspaper and hired an assistant to help carry her expensive photography equipment around photo shoots, but few people were interested in paying Jo for her photography. For the year ending 30 June 2020 Jo sold $12,200 worth of professionally finished photographs and had expenses of $16,500. She is considering selling her photography equipment and taking up painting.
Referring mainly to income tax cases, advise Jo of the tax implications (Australian) of these activities. Would she be carrying on a business? What implications would this have? Please include specific advice on whether receipts would be assessable and whether expenses would be deductible. Refer to relevant cases and statutory provisions in your answer.
Step by step
Solved in 3 steps
- Staci Valek began dabbling in pottery several years ago as a hobby. Her work is quite creative, and it hasbeen so popular with friends and others that she has decided to quit her job with an aerospace company andmanufacture pottery full time. The salary from Staci’s aerospace job is $3,800 per month.Staci will rent a small building near her home to use as a place for manufacturing the pottery. Therent will be $500 per month. She estimates that the cost of clay and glaze will be $2 for each finishedpiece of pottery. She will hire workers to produce the pottery at a labor rate of $8 per pot. To sell herpots, Staci feels that she must advertise heavily in the local area. An advertising agency states that it willhandle all advertising for a fee of $600 per month. Staci’s brother will sell the pots; he will be paid acommission of $4 for each pot sold. Equipment needed to manufacture the pots will be rented at a costof $300 per month.Staci has already paid the legal and filing fees…Kendall purchased an office building in Atlanta's growing west end. The building is 70 years old and has been empty for over ten years. The offices are in disrepair. First thing Kendall must do is to hire a painter to paint the interior of the office building. Kendall reaches out to Cameron, and they have the following conversation: Kendall: I will pay you $25,000 to paint the interior of my office building. Cameron: I have seen your office building, it will cost you $75,000 for me to paint that building's interior. Kendall: Ah, yes. Well, let's split it down the middle. I will pay you $50,000.00. Cameron: OK. I agree to do it for $50,000, but you must also supply the paint, brushes, ladders, tarps, cleaner, and other equipment I need. Does a contract exist between Kendall and Cameron?? Explain fully using IRAC.Staci Valekbegan dabbling in pottery several years ago as a hobby. Her work is quite creative, and it has been so popular with friends and others that she has decided to quit her job with an aerospace company and manufacture pottery full time. The salary from Staci’s aerospace job is $3,800 per month. Staci will rent a small building near her home to use as a place for manufacturing the pottery. The rent will be $500 per month. She estimates that the cost of clay and glaze will be $2 for each finished piece of pottery. She will hire workers to produce the pottery at a labor rate of $8 per pot. To sell her pots, Staci feels that she must advertise heavily in the local area. An advertising agency states that it will handle all advertising for a fee of $600 per month. Staci’s brother will sell the pots; he will be paid a commission of $4 for each pot sold. Equipment needed to manufacture the pots will be rented at a cost of $300 per month. Staci has already paid the legal and fi ling fees…
- After graduating from college, Shelley Williams held several different jobs but found that she did not enjoy working for other people. Finally, she and Yvonne Hargrove, her college roommate, decided to start a business of their own. They rented a small building and opened a florist shop selling cut flowers such as roses and chrysanthemums that they bought from a local greenhouse. Williams and Hargrove agreed orally to share profits and losses equally, although they also decided to take no money from the operation for at least four months. No other arrangements were made, but the business did reasonably well, and after the first four months had passed, each began to draw out $500 in cash every week. At year-end, they took their financial records to a local accountant so that they could get their income tax returns completed. He informed them that they had been operating as a partnership and that they should draw up formal articles of partnership agreement or consider incorporation or…Heather and Dan Holt met while both were employed in the interior trim and upholstery department of an auto manufacturer. After their marriage, they decided to earnsomeextra income by doing small jobs involving canvas, vinyl, and upholstered products. Their work was considered excellent, and at the urging of their customers, they decided to go into business for themselves, operating out of the basement of the house they owned. To do this, they invested $120,000 cash in their business. They spent $10,500 for a sewing machine (expected life 10 years) and $12,000 for other miscelianeous tools and equipment (expected life 5 years). They undertook only custom work, with the customers purchasing the required materials, to avoid stocking any inventory other than supplies. Generally, they required an advance deposit on all jobs. The business seemed successful from the start, as the Holts received orders from many customers. But they felt something was wrong. They worked hard and charged…Belinda wants to buy a second-hand car and visits a number of car dealers before deciding to purchase an as new 1998 Ford Mustang from American Car Sales. The sales person, Jaxson, tells Belinda that the car was manufactured in 1998 and had only done 54,000 kms. Three months later, Belinda has the Mustang serviced with her local mechanic who was a Mustang enthusiast. He comments on the fact that the car was in pretty good condition for a 1994 Mustang, though he was surprised that it had only done 54,000 kms. He would not have been surprised if it had done 100,000 kms. Belinda makes further inquiries and discovers that the Mustang was in fact made in 1994 and she has paid about $5,000 more than the actual market value of the car. Belinda intends to approach American Car Sales about this issue. Does Belinda have any contractual rights against American Car Sales? Required: You are expected to discuss legal rules learned regarding terms of a contract, in particular statements and…
- Erica trades as a financial adviser. She rents an office in the town centre and employs three full-time staff. She advises clients on how to manage their savings, investments and pension funds. Erica decided that she needed a new computer system for the business in order to improve efficiency. The following expenditure was incurred when the new system was purchased: Cost of computer $1900 Paper, ink cartridges and other consumables $110 Cost of colour laser printer $450 Installation and testing costs $200 Staff training on new system $500 Annual insurance against theft and breakdowns $90 Cost of rewiring to accommodate new computer $340 Annual maintenance agreement $99 REQUIRED: Calculate the total of capital expenditure incurred by Erica’s business when acquiring the computer system. To what extent would the business’s profits have been reduced by the expenditure listed. If Erica had borrowed $3000 to pay for the new computer system, how would the interest payments on the…During their senior year at Clarkson College, two business students, Gerry Keating and Louise Lamont, began a part-time business making personal computers. They bought the various components from a local supplier and assembled the machines in the basement of a friend's house. Their only cost was $364 for parts; they sold each computer for $633. They were able to make three machines per week and to sell them to fellow students. The activity was appropriately called Keating & Lamont Computers (KLC). The product quality was good, and as graduation approached, orders were coming in much faster than KLC could fill them. A national CPA firm made Ms. Lamont an attractive offer of employment, and a large electronics company was ready to hire Mr. Keating. Students and faculty at Clarkson College, however, encouraged the two to make KLC a full-time venture. The college administration had decided to require all students in the schools of business and engineering to buy their own computers…During their senior year at Clarkson College, two business students, Gerry Keating and Louise Lamont, began a part-time business making personal computers. They bought the various components from a local supplier and assembled the machines in the basement of a friend's house. Their only cost was $363 for parts; they sold each computer for $638. They were able to make three machines per week and to sell them to fellow students. The activity was appropriately called Keating & Lamont Computers (KLC). The product quality was good, and as graduation approached, orders were coming in much faster than KLC could fill them. A national CPA firm made Ms. Lamont an attractive offer of employment, and a large electronics company was ready to hire Mr. Keating. Students and faculty at Clarkson College, however, encouraged the two to make KLC a full-time venture. The college administration had decided to require all students in the schools of business and engineering to buy their own computers…
- Jane has a full‐time job employed as a teacher, but is an avid DIY renovator. In December 2015 she bought a bungalow, repainted it inside and out, and carried out a “makeover” of the garden while living in it. A real estate agent approached her and convinced her that she could make a quick profit if she put the house on the market. She did this in February 2016 and sold it for $100,000 profit after expenses. Encouraged by this, Jane plans to repeat the exercise on a regular basis. She asks you for tax advice, as she has heard that house sales can be taxable in some circumstances. What are the tax rules that apply specifically for sales of residential property? Will any of the exemptions apply to this sale or to future sales that Jane might make?Although Goldman Sachs paid Heather $100,000.00 per year, she was not satisfied with her job. She had loved going white-water rafting and skiing with her family in Utah since she was a little girl. So last year, she decided to open her own business: Family Adventures. During the summer, she takes families on different white-water trips, and in the winter, she leads clients on skiing trips. To start her business, Heather borrowed $100,000 from a bank and used $70,000.00 of her savings. Her savings earned 10% interest. At the end of the year, she wanted to know whether her new business venture was worthwhile. The table below lists her total revenue and itemized costs for Family Adventures. Item Annual Dollar Value Total revenue $200,000.00 Employee wages $100,000.00 Rent on her business office $25,000.00 Payments on bank loan $10,000.00 Utility and gas expenses $5,000.00Sky is the owner of a small business called Sky's Skateboards. Sky, who grew up in a circle of avid boarders, started the business last year, initially adding cool designs to her siblings' and friends' skateboards. After a year of painting skateboards, Sky realized that her add-on design business was slowing down, but there was unmet local demand for custom designed skateboards. Many people had seen her designs and shown up at her doorstep looking for new skateboards for themselves, their kids, or their significant other. Over the holiday season, Sky had done some research and found she could order quality skateboards in basic colours (black, white, blue, etc) for $50 each. She expects to sell boards for $100 each after designing them. If a customer wants to request a specific design, she will charge a premium and sell the skateboard for $125. For the past year, Sky has customized used skateboards for $30 each (the average job took $5 in materials and an hour of her time).…