Accounting A asked:


Instructions
Designate the best answer for each of the following questions.

Use the following data for questions 1 and 2 below:

Carlo Company bought real estate, on which there was an old office building, for $900,000. They paid $90,000 in cash as a down payment and signed a 6% mortgage for the remainder. They immediately had the old building razed at a net cost of $30,000, the salvaged materials were sold for $4,200. Attorneys were paid $7,000 in connection with the land purchase and an additional $3,000 in connection with permits and zoning variances necessary for Carlo’s new office building. $25,000 was paid for excavation for the basement of the new building. $2,100,000 was paid for construction of the new building, and $95,000 was paid for a parking lot and necessary walkways and driveways.

_____3.Martin Textile purchased machinery for $50,000 eight years ago. It was expected to have a useful life of ten years, no salvage value, and was depreciated using the straight-line method. At the end of its eighth year of use it was retired from service and given to a junk dealer. The entry to record the retirement includes a
a.debit to Loss on Disposal for $10,000.
b.debit to Machinery for $50,000.
c.debit to Depreciation Expense for $10,000.
d.credit to Accumulated Depreciation—Machinery for $40,000.

_____ 4.Which of the following should not be included in the plant assets (property, plant, and equipment) classification?
a.Land on which warehouse sits
b.Building housing corporate headquarters
c.Parking lot used by visitors
d.Land held for investment.

_____5.Salvage value is deducted for the initial computation of depreciation expense in all of the following methods with the exception of
a.straight-line.
b.units-of-activity.
c.declining-balance.
d.All of the above include a deduction of salvage value.

_____6.The cost of a patent should be amortized over
a.40 years.
b.the shorter of its legal life or its useful life.
c.the longer of its legal life or its useful life.
d.its useful life.

____8.Which of the following is not an intangible asset?
a.Research and development costs
b.Copyrights
c.Organization costs
d.Goodwill

_____11.Stome Corp. issued $300,000 of 5%, 5-year bonds at 102 on January 1, 2006. The straight-line method of amortization is used and the bonds pay interest annually on January 1. The amount of bond interest expense that Stome should report on its 2006 income statement is
a.$16,200.
b.$13,800.
c.$15,000.
d.$14,400.

____12.Front Corporation issues its bonds at a discount. Amortization of the discount will
a.decrease bond interest expense.
b.increase bond interest expense.
c.decrease the carrying value of the bonds on the balance sheet.
d.be reported as a loss on the income statement.

____13. Failure to record a liability will probably
a.result in a overstated net income.
b.result in overstated total liabilities and owner’s equity.
c.have no effect on net income.
d.result in overstated total assets.

____15. Gunder Company does not ring up sales taxes separately on the cash register. Total receipts for October amounted to $18,900. If the sales tax rate is 5%, what amount must be remitted to the state for October’s sales taxes?
a.$900
b.$945
c.$45
d.It cannot be determined.

____17. The Muffin Company issued a five-year interest-bearing note payable for $50,000 on January 1, 2005. Each January the company is required to pay $10,000 on the note. How will this note be reported on the December 31, 2006, balance sheet?
a.Long-term Debt, $50,000
b.Long-term Debt, $40,000
c.Long-term Debt, $30,000; Long-term Debt due within one year, $10,000
d.Long-term Debt of $40,000; Long-term Debt due within one year, $10,000

Joe Joe Paul asked:


Will someone please tell this guy before he sells this ball for $500,000 that the IRS cannot tax him on the value of the ball, as the ball is not money, the fan has not received any money for it, and the ball is worth nothing UNLESS the fan actually does indeed sell it. If the IRS thinks it can do such a thing, I doubt it would take much effort for this guy to find an attorney or several who will take his case and successfully argue that he has received no income in relation to owning this baseball. He is being dupped into selling it for a fraction of what it will be worth 5 or 10 years from now.

eliza_marie_2005 asked:


i have to pay the irs back and it will take up to 5 years….my used to be friend who helped me who helped me fill out the tax form said she would try to help me try to get the money back if i went to a prosecuting attorney…..do i have a case? if i have a witness and the 2 childrens ssn’s?

brendad asked:


I have been married to a sociopath for 8 years. I am wife# 3. We share a child, who adores both of us. From the start he was so attentive. I did wonder however, why he had soul custody of his two teenage boys and their Mother never was mentioned or involved with them. He is very controlling and they were not allowed to mention her name. I became pregnant, he then suggested I get an abortion by taking a pill. I refused. We eventually got married. It was so gradual. I watched him browbeat his younger son , who was fond of his mother. To the point where his son was having panic attacks which led to heavy drinking and drugs.And later showed signs of violent behavior. The older son however is his favorite. Later I found out because he does as he is told. Needless to say when the boys left home, I became his punching bag. He has recruited his whole family against me.It has made my life a living hell, since my family is deceased. I had the good credit when we met. He had none. I put his name on my cards. He then forged my signature for huge amounts of cash. When his business failed I am left holding the cards literally! Thousands of dollars. I learned he owed the IRS quited a large sum of money which he lied about. We lost our home. After I refused to sign Power of Attorney on his tax lien , he made my life unbearable. Often times he would bring in his fav. son to get in my face and try and set me off. I warned him, the next time the police would be called and he would be escorted off the property. This man is very cunning, noone ever hears the things he says to me. It is emotional and mental abuse of severity. I have called the women’s shelter and the women’s crisis center for help several times over the years. Appears to be hopeless. I am afraid of him. I have seen him set people up for failure. He is a convincing, practised liar. and has an exceptional verbal facility, which can outmanoeuvre most people in times of conflict. I just feel as though there isn’t any hope. He is the actual Jekyll and Hyde nature. a very scary individual. sometimes i wonder if it’s easier to stay in the marriage rather then face divorce. I do know I cannot go on feeling this way it just gets worse with time. Open for suggestions……………

lennyuzbek asked:


I’m thinking to start online historical stock and bonds valuations for tax purpoces. Mainly this kind of bisness target Estate attorneys and CPA’s. There’s not much competition in this business. This data not available for free search on MSN or Yahoo. Well it’s available but incomplete. I’m programer and know web and technology. I can built sites. I have already code and everything esle. What esle do i need to start, besides technical stuff?

Need Answers asked:


do you have to use the PoA from the IRS website or can you use a regular PoA?
Also- if I use the one from the IRS website how do i go about doing that? does it have to be signed notarized and sent back to the IRS for review? Ive read on it but its confusing….
Once I have the check after all this is settled will I be able to just cash the check myself with no problem showing proof of POA?

Jeanne J asked:


A buyer has made an offer using a contract for deed; house is 239,900; want to put 1000 earnest money; get an FHA loan (he has been pre-approved for FHA as well as conventional) and we are worried that come next May if he didn’t get the money we would get the house back. He will make $1100 monthly payments for 6 months, 600 going to the house, rest to taxes and insurance. If this falls through, we do not want to go through litigation.
Can’t get blood out of a turnip they say. It is our only solid offer. Would it be better to pass on this and keep marketing and try to get a buyer who can buy now? Most have houses to sell which is a problem as well. Buyer also wants an FHA mortgage which I understand the appraisal is much harder to pass. Our house is nice but it could be a problem.

We do have an attorney but I still worry that any contract could be broken.

We have no mortgage on the house but we have purchased another one which we would like to move into. No mortgage on that one as well but keeping up with utilities, taxes and insurance on both homes can be costly.

brendan k asked:


taxes, attorneys, fees?

tanyarod11 asked:


My husband wants the title transferred to our names since we will be moving in. We will be making renovations,installing central air, etc. The house is paid off,no back taxes, no liens. I don’t know if should go to a real estate attorney, title company, or what? She spent less than 120 days in a nursing home last year (medicaid/medicare), can they still claim her home when she dies. We don’t want to move in and update the house just so they can put a lien on the house and remove us from the home when she passes away.
My sister told me in the state of texas there is a clause regarding medicaid recipients who own their own home. Apparently if you stay a certain amount of time in a nursing home the state will put a lien on the house after the recipient dies even if the title has been transferred.

Leticia S asked:


So today i get a letter saying the Credit union i had my car with that i voluntary Repposetion is wanting for me to pay them 13,705.67 YEAH let me just bend over and pull that out of my secrete hiding spot LOL…

Well im going to file chapter 7 which i qualify for but i have to wait till i file income tax to pay it in full… but i might not have time. They will take action in 30 days of this letter… what can i expect…

it says to pay it in full or send in a good faith partial payment and to contact them for payment arrangements soo im thinking about sending them a $1.00 money order and write here is my good faith partial payment. LOL i mean will that keep them from doing anything sooner ??

does it matter if im in Texas and they are in Florida… Has anyone heard of jacobson Sobo & moselle attorney at law? floridacollections.com???

well i hope i get an answer… i believe chapter 7 bankrupsy will keep them out of my A$$