The accrual method of accounting

Assignment Help Accounting Basics
Reference no: EM13703958

Taxpayer is a securities firm which uses the accrual method of accounting. Taxpayer executes stock trades and performs settlement functions. Settlement functions include recording the sale and confirming it with the customer. Trades made on December 28, 2013, until the end of the month are not settled until January of 2014. Taxpayer made $1,000,000 of net commissions from these trades in late December. Since the security is not credited to the customer's account until settlement date, taxpayer wants to declare the income on the settlement dates in 2014. Taxpayer does not receive the money until January 2014. Advise the taxpayer which is the proper period of recognition by preparing a formal tax memo.

Reference no: EM13703958

Questions Cloud

Calculate the profits of commercial and residential service : Hillview Garden Care Inc. is a lawn and garden care service. The company originally specialized in serving small residential clients but has recently started contracting for work on large apartment and office building grounds. Since Phyllis Flo..
What is the total amount of amortization expense : At the beginning of the year, Big Time Tires acquired 100% of the common stock of Discount Tires. The purchase price allocation included the following items: $770,000, patent; $250,000, trademark considered to have an indefinite useful life; an..
Comment brie?y on whether the contributions from donors : For purposes of external reporting, not-for-pro?ts-unlike governments in their governmental funds-do not distinguish between plant and other types of resources. In 2014, the Northwest Ballet Association (NBA), a not-for-pro?t performing arts or..
Determine the work done on the object by the applied force : An object initially at an elevation of 5 m relative to Earth's surface with a velocity of 50 m/s is acted on by an applied force R and moves along a path. Its final elevation is 20 m and its velocity is 100 m/s. The acceleration of gravity is 9.81 m/..
The accrual method of accounting : Taxpayer is a securities firm which uses the accrual method of accounting. Taxpayer executes stock trades and performs settlement functions. Settlement functions include recording the sale and confirming it with the customer. Trades made on De..
What is the volume capacity of cylinder with stops engaged : 0.5 kg of water initially at 400 kPa and 0.3 m3/kg is contained within a piston-cylinder device fitted with retractable stops (initially retracted) so that the water supports the weight of the piston and the force of the atmosphere (state 1). The wat..
Examine the throughput of a tcp connection : Compare the Weighted Fair Queuing, Priority Queuing, and FIFO schemes in terms of drop rate, delay, and delay variation. What are the advantages and disadvantages of each - examine the throughput of a TCP connection as the flow control window size..
The hardness of clay at three different temperatures : My manufacturing processes professor gave us this question, and said we can use temperatures from our fridge, freezer, etc. I don't even know where to start on this problem, or end for that matter.
Company s corporation election was made on january : 1. John Parsons (123-45-6781) and George Smith (123-45-6782) are 70% and 30% owners, respectively, of Premium, Inc. (11-1111111), a candy company located at 1005 16th Street, Cut and Shoot, TX 77303. The company's S corporation election was made ..

Reviews

Write a Review

Accounting Basics Questions & Answers

  Hugo reyes company had the following account balances at

hugo reyes company had the following account balances at year-end cost of goods sold 70040 merchandise inventory 22410

  Discuss the compensation packages for accounting

discuss the compensation packages for accounting professionals. is the compensation commensurate with the

  Sam who earns a salary of 400000 invested 160000 for a 40

sam who earns a salary of 400000 invested 160000 for a 40 working interest in an oil and gas limited partnership not a

  What is the materials price variance for the month

What is the materials price variance for the month and what is the materials quantity variance for the month

  Supplies expense of the year

A company office supplies account shows a beginning balance of $600 and an anding balance of $400. if office supplies expense of the year is $3,100, what amount of office supplies was purchased during the period?

  Benefit to prepare financial statements on accrual basis

After reviewing Mr. Donaldson's accounting information, you are about to write a business memo to Mr. Donaldson. In the memo, you should compare cash-based operating cash flows with accrual-based net income and explain why it is of Mr. Donaldso..

  Tracey is a sales representative for a national

tracey is a sales representative for a national pharmaceutical company. she has a rather large sales territory and she

  Perspective of a potential investor

Discuss the implications of gain from the perspective of a potential investor - year-end earnings announcement

  March april and may have been in partnership for a number

march april and may have been in partnership for a number of years. the partners allocateall profits and losses on a

  Trying to get the priceearning ratio for the coca-cola

trying to get the priceearning ratio for the coca-cola company for the last 5 years starting in 2011.

  How much cash should be paid to kent

Jane, Kent, and Tracy have income ratios of 5 :3 :2 and capital balances of $34,000, $31,000, and $28,000, respectively. Noncash assets are sold at a gain. After creditors are paid, $119,000 of cash is available for distribution to the partners. ..

  Eichelberger trucking won a settlement in a lawsuit and was

eichelberger trucking won a settlement in a lawsuit and was offered four different payment alternatives by the

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd