This year Barney purchased 500 shares of Bell common stock for $20 per share. At year-end the Bell shares were only worth $2 per share. What amount can Barney deduct as a loss this year

Answers

Answer 1
Answer:

Answer:

Barney is not entitled to a loss deduction.

Explanation:

Barney is not qualified for a loss deduction. Barney cannot have any realization because the stock has not been sold or become worthless. If Barney's stock becomes worthless then generally he may deduct its tax basis in the stock as a worthless stock loss for the year in which the stock becomes worthless.


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Motors is a chain of car dealerships. Sales in the fourth quarter of last year were $4,600,000. Suppose management projects that its current​ year's quarterly sales will increase by 3​% in quarter​ 1, by another 7​% in quarter​ 2, by another 5​% in quarter​ 3, and by another 4​% in quarter 4. Management expects cost of goods sold to be 45​% of revenues every​ quarter, while operating expenses should be 30​% of revenues during each of the first two​ quarters, 25​% of revenues during the third​ quarter, and 20​% during the fourth quarter.Required:a. Prepare a budgeted income statement for each of the four quarters and for the entire year.b. Prepare the first portion of the budgeted income statement through gross profit, then complete the statement.

Compute the missing amounts. ​(Enter the contribution margin ratio to nearest​ percent, X%.)A B C
Sales price per unit $200 $4,000 $5,220
Variable costs per unit 80 1,000 2,088
Total fixed costs 73,200 660,000 3,758,400
Target profit 266,760 3,000,000 3,132,000
Calculate:
Contribution margin per unit
Contribution margin ratio
Required units to break even
Required sales dollars to break even
Required units to achieve target profit

Answers

Answer:

Contribution margin per unit

A =  $120

B =    $3,000

C =  $3,132

Contribution margin ratio

A = 60%

B =   75%

C = 60%

Units to break even

A =  610 units

B =    220 units

C = 1,200 units

Sales dollars to break even

A = $122,000

B =   $880,000

C = $6,264,000

Units to achieve target profit

A = 2,833 units

B = 1220 units

C = 2,200 units

Explanation:

Contribution margin per unit

Contribution margin = Sales - Variable Costs

                                               A              B                 C

Sales price per unit           $200      $4,000        $5,220

Variable costs per unit      ($80)     ($1,000)      ($2,088)

Contribution Margin          $120      $3,000         $3,132

Contribution margin ratio

Contribution margin ratio = Contribution / Sales × 100

A = $120 / $200 × 100

   = 60%

B =   $3,000  / $4,000 × 100

   = 75%

C = $3,132 / $5,220 × 100

   = 60%

Units to break even

Units to break even = Fixed Cost ÷ Contribution margin per unit

A = $73,200 ÷  $120

   = 610 units

B =   $660,000  ÷   $3,000

   = 220 units

C = $3,758,400 ÷   $3,132

   = 1,200 units

Sales dollars to break even

Units to break even = Fixed Cost ÷ Contribution margin ratio

A = $73,200 ÷  60%

   = $122,000

B =   $660,000  ÷   75%

   = $880,000

C = $3,758,400 ÷   60%

   = $6,264,000

Units to achieve target profit

Units to achieve target profit = Fixed Cost + Target Profit ÷ Contribution margin per unit

A = $73,200 + 266,760 ÷  $120

   = 2,833 units

B =   $660,000 + 3,000,000  ÷   $3,000

   = 1220 units

C = $3,758,400 + 3,132,000 ÷   $3,132

   = 2,200 units

Cash 5,345 Accounts Receivable 2,662 Prepaid Expenses 725 Equipment 14,421 Accumulated Depreciation 6,970 Accounts Payable 1,643 Notes Payable 5,223 Common Stock 1,000 Retained Earnings 6,003 Dividends 664 Fees Earned 7,033 Wages Expense 2,463 Rent Expense 804 Utilities Expense 441 Depreciation Expense 234 Miscellaneous Expense 113 Totals 27,872 27,872 Determine the net income (loss) for the period.

Answers

Answer:

Net income = $8,318

Explanation:

Current asset

Cash 5,345

Accounts receivables 2,662

Prepaid expenses 725

Total 8,732

Fixed asset

Equipment 14,421

Less dep. 6,970

Balance. 7,451

Total 8,733 + 7,451 = 16,184

Current liabilities

Accounts payable 1,643

Notes payable. 5,223

Total. 6,866

Financed by

Common stock 1,000

Net Income. 8,318

Total 6,866 + 9,318 = 16,184

Which statement is an objection of using the Consumer Price Index (CPI) to measure changes in the cost of living

Answers

Complete Question:

Which of the following is an objection of using the Consumer Price Index (CPI) to measure changes in the cost of living?

A. The calculated inflation rate is only accurate for an individual who purchases all the goods and services in the basket.

B. The inflation rate is always understated due to substitution bias.

Answer:

Consumer Price Index (CPI)

A. The calculated inflation rate is only accurate for an individual who purchases all the goods and services in the basket.

Explanation:

To obtain the Consumer Price Index (CPI), a predetermined basket of consumer goods and services is obtained.  Weights are assigned to the goods according to their relative values in the basket.  The price changes are calculated.  The resulting figures  are averaged to determine the CPI.

Answer:

The calculated inflation rate is only accurate for an individual who purchases all the goods and services in the basket.

Explanation:

A sudden fall in the market demand in a competitive industry leads to a. A short run market equilibrium price lower than the original equilibrium b. A market equilibrium price higher than the short run price c. Some firms exiting the market d. All of the above

Answers

Answer:

The answer is C. Some firms exiting the market

Explanation:

When there is a sudden fall in the market demand in a competitive industry(e.g perfect competition) some firms would making economic losses and it is best if they shut down operation and production. Once these happen, they exit the market.

Option A is incorrect . Same as option B.

Option D is also incorrect

Final answer:

A sudden fall in market demand in a competitive industry can lead to a short-run market equilibrium price lower than the original equilibrium, some firms exiting the market, and a market equilibrium price higher than the short-run price.

Explanation:

In a competitive industry, a sudden fall in market demand can have several effects. The correct answer is (d) All of the above. When market demand falls, it creates excess supply in the market, leading to a decrease in the market equilibrium price. This means that option (a) is correct. The lower price in the short run may cause some firms to exit the market due to lower profitability, which confirms option (c). Lastly, in the long run, if demand remains low, the market equilibrium price may eventually be higher than the short-run price as the supply adjusts to the lower demand, validating option (b).

Learn more about market demand here:

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Hatfield Corporation, which has only one product, has provided the following data concerning its most recent month of operations:Selling price $123Units in beginning inventory 0Units produced 6,400Units sold 6,100Units in ending inventory 300Variable costs per unit: Direct materials $45 Direct labor $30 Variable manufacturing overhead $1 Variable selling and administrative $8Fixed costs: Fixed manufacturing overhead $140,800Fixed selling and administrative $91,500What is the net operating income for the month under variable costing?a) $12,200b) ($17,200)c) $5,600d) $6,600

Answers

Answer:

Instructions are below.

Explanation:

Giving the following information:

Selling price= $123

Units sold= 6,100

Variable costs per unit:

Direct materials $45

Direct labor $30

Variable manufacturing overhead $1

Variable selling and administrative $8

Fixed costs:

Fixed manufacturing overhead $140,800

Fixed selling and administrative $91,500

First, we need to calculate the total variable cost per unit:

Variable cost per unit= 45 + 30 + 1 + 8= $84

Income statement:

Sales= 6,100*123= 750,300

Total variable cost= 6,100*84= (512,400)

Contribution margin= 237,900

Fixed manufacturing overhead= (140,800)

Fixed selling and administrative= (91,500)

Net operating income= 5,600

Members should use the AICPA conceptual framework for independence to:a) come to different conclusions than the interpretations of the code of professional conduct.
b) Evaluate independence matters not addressed in the code of professional conduct.
c) understand the rules on the confidential client information and acts discreditable to the profession.
d) more easily interpret conflicts of interest and subordination of judgement by a member.

Answers

Option C is the correct answer. The AICPA's conceptual framework for independence is utilized or used to assess any challenges to members' independence.

Litigation, adverse interest between or among the CPA firm and the client, self-interest, familiarity outcoming in a financial benefit result to the CPA firm, CPA firm owning stock in the client's firm, and so on are all examples of threats

In the new AICPA Code, two conceptual frameworks;

  • One for participants in public accounting

  • One for participants in the sector reflects a significant change in substance.

The conceptual framework strategy is one manner in which warnings to completely comply with rules originating from a specific link or condition that are not covered by the code can be;

  • Discovered

  • Assessed

  • Resolved

Therefore, Option C) "Understand the rules of confidential client information and professional misconduct." is the correct answer. 

To know more about these frameworks, click below:

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Members should use the AICPA conceptual framework for independence to  understand the rules on the confidential client information and acts discreditable to the profession.

Option C

Explanation:

Two conceptual frameworks, one each for participants in public accounting and one for participants in the sector, represent a major change to substance in the updated AICPA Code.

In all of these two implementation frameworks, the conceptual framework strategy is one way in which warnings to fully comply with rules arising from a specific connection or circumstance which are not covered by the code can be identified, assessed and addressed.

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