Accounting for pension, Taxation

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Cecil C. Seymour is a 646-year-old widower. He had income for 2013 as follows:


Pension from former employer $39,850,
Interest income from Alto Nationl Bank 5,500,
Interest income on City of Alto bonds 4,500,
Dividends received from IBM 2,000,
Collections on annuity contract he purchased from Great life insurance 5,400,
Social Security benefits 14,000,
Rent income on townhouse 9,000

The cost of the annuity was $46,800, and Cecil was expected to receive a total of 260 monthly payments of $450. Cecil has received 22 payments through 2013.
Cecil's 40-year-old daughter, Sarah C. Seymour, borrowed $60,000 from Cecil on January 2, 2013. She used the money to start a new business. Cecil does not charge her interest because she could not afford to pay it, but he does expect to eventually collect the principal. Sarah is living with Cecil until the business becomes profitable. Except for housing, Sarah provides her own support from her business and $1,600 in dividends on stock that she inherited from her mother.
Other relevant information is presented below:
•Cecil's Social Security number: 123-45-6785,
•Address: 3840 Springfield., Blvd, Alto, GA 30510,
•Sarah's Social Security number: 123-45-6784,
•Expenses on rental townhouse:
Utilities $2,800,
Maintenance 1,000,
Depreciation 2,000,
Real estate taxes 750,
Insurance 700,
•State income taxes paid: $3,500,
•County personal property taxes paid $2,100,
•Payments on estimated 2011 Federal income tax: $5,900,
•Charitable contributions of cash to Alto Baptist Church: $6,400,
•Federal interest rate: 6%,
•Sales taxes rate paid: $912,
Compute Cecil's 2013 Federal income tax payable (or refund due).

Q44
Dixon Corporation is acquiring Martin Corporation in a Type A reorganization by exchanging 40% of its voting stock and $50,000 for all of Martin's assets (value of $850,000 and basis of $600,000) and liabilities ($200,000). The shareholders of Martin are Tina (650 shares) and Curby (350 shares). They bought their stock for $500 per share. What is the amount of gains or losses that Tina and Curby will recognize due to the reorganization? What is the value of the stock they received from Dixon, and what is their basis in the Dixon stock?

Q45
how do i create a tax plan for the future redemption of the client's stock owned in the construction company that will not be taxed according to Section 301 of the IRC

Q46
An investor buys a one-year $1,000 face-value US treasury bill (or T-Bill) for $960. The investor expects to receive $1,000 at maturity in one year. What is the anticipated rate of return on this investment?

Q47
Watson Clinic is evaluating a project that costs $52,100 and has expected annual net cash inflows of $11,500 for eight years. The first inflow occurs one year after the cost outflow, and the project has a cost of capital of 12 percent.
What is the project's NPV
Timeline: 0|---------|-----------|----------|--------------|-----------|-----------|------------|------------|
11,500 12,880 14,425 16,156 18,095 20,266 22,698 25,422
NVP(0.12,11500:25422) - 52,100 =

What is the project's IRR
IRR = IRR(0.12, 11500:25422) - 52100 =
Is the project financially acceptable? Please explain your answer.

Q48
Timber Ridge Corporation was organized on January 1, 2013. During its first year, the corporation issued 40,000 shares of $5 par value preferred stock and 400,000 shares of $1 par value common stock. At December 31, the company declared the following cash dividends:
2013 $ 8,000
2014 $30,000
2015 $70,000
Instructions
(a) Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 5% and not cumulative.
(b) Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 6% and cumulative.
(c) Journalize the declaration of the cash dividend at December 31, 2015 using the assumption of part (b).
(a) Preferred Common Total
2013
2014
2015
(b) Preferred Common Total
2013
2014
2015

 


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