taxable income, Taxation

Assignment Help:
The following 2012 projected income statement is provided by your new client, John Green, single, and sole proprietor of Green Industries. Green Industries started business in March 2009. This income statement is prepared using generally accepted accounting principles.
Sales $ 4,500,000
Cost of Goods Sold 1,500,000
Gross Profit $ 3,000,000
Compensation paid to employees 1,630,000
Total Social Security and Medicare Tax related to employees 90,000
Research and Development Expense 580,000
Depreciation Expense 650,000
Net Income $ 50,000
The following additional information is provided:
1. For financial statement purposes, research and development costs are written off in the year incurred.
2. When the business was formed in 2009, $400,000 of costs were incurred and appropriately characterized as “startup costs”. For financial statement purposes these costs are capitalized and not amortized.
3. For assets acquired before 2012, the appropriately calculated tax depreciation for 2012 is $150,000. During 2012, $320,000 of depreciable assets were acquired. All of these assets are in the category of assets that can be written off over a seven year period.
4. The 2011 Schedule C showed a loss of $320,000.
5. The 2010 Schedule C showed a profit of $50,000.
Assuming John has no other source of income for years 2010 through 2012; calculate John’s 2012 taxable income and tax liability.
Explain your calculations clearly indicating why each deductible expense is claimed.

Related Discussions:- taxable income

Calculate the taxable income under the throwback rule, This year, the Coral...

This year, the Coral Company Inc. generated $650,000 from its routine business operations. In addition, it sold the following assets, all of which were held for more than 12 months

Unit rates, I still don''t know this yet but my teacher wants me to do this...

I still don''t know this yet but my teacher wants me to do this a i don''t know this topic?

Income from salary, Kyle worked as a free-lance software engineer for the f...

Kyle worked as a free-lance software engineer for the first three months of 2013. During that time, he earned $78,000 of self-employment income. On April 1, 2013, Kyle took a job a

Managing dicrete assignment, Ask qmanaging dicrete assignmentuestion #Minim...

Ask qmanaging dicrete assignmentuestion #Minimum 100 words accepted#

Assignment , I have the whole case and this is the question (Canadian Taxa...

I have the whole case and this is the question (Canadian Taxation) Compute Net Income, Taxable Income and Net Federal Tax Payable for 2012 for Sandra, Steven, Annabelle and Ronnie

Prepare the journal entries necessary at december 31, The Diamond Glitter C...

The Diamond Glitter Company is in the process of preparing its financial statements for 2012. Assume that no entries for depreciation have been recorded in 2012. The following info

Calculate the change output growth , Utilize Okun's law to answer the quest...

Utilize Okun's law to answer the questions below;  u t  - u t-1  = -0.4(g yt  - 3%) Assuming u t-1  = 7% a. Calculate the change in u (u t  - u t-1 ) for each of the followin

Deductions, Roberta Santos, age 41, is single and lives at 120 Sanborne Ave...

Roberta Santos, age 41, is single and lives at 120 Sanborne Avenue, Springfield, IL 60781. Her Social Security number is 123-45-6789. Roberta has been divorced from her former husb

Explain the characteristics of an efficient tax system, Question 1: (a)...

Question 1: (a) Why does Government intervene in the market's allocation of resources even if the economy is Pareto efficient? (b) What are the principal reasons why marke

Tds, Dawn's new car has a FMV of $20,000 and it weighs 3,000 pounds. The co...

Dawn's new car has a FMV of $20,000 and it weighs 3,000 pounds. The county also assessed a property tax on the car. The tax was 2% of its FMV and $10 per hundred weight. The car is

Write Your Message!

Captcha
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