Ben and Molly are married and will file jointly. Ben generates $300,000 of qualified business income from his single-member LLC (a law firm). He reports his business as a sole proprietorship. Wages paid by the law firm amount to $40,000; the law firm has no significant property. Molly is employed as a tax manager by a local CPA firm. Their modified taxable income is $386,600 (this is also their taxable income before the deduction for qualified business income). Determine their allowable QBI deduction for 2020. $fill in the blank 1

Answer:

A. $8,000

B. $14,400

Explanation:

A. Calculation to determine their tentative QBI based on the W-2 Wages/Capital Investment Limit

First step is to calculate the Applicable Percentage

Applicable percentage= 100%-($386,600 - $326,600)/100,000

Applicable percentage=40%

Now let Calculate the tentative QBI based on the W-2 Wages/Capital Investment Limit

GREATER OF BELOW:

Tentative QBI based on the W-2 Wages/Capital Investment Limit=50% of W-2 wages ($40,000 × 50% × 40%)

Tentative QBI based on the W-2 Wages/Capital Investment Limit=$8,000

OR

Tentative QBI based on the W-2 Wages/Capital Investment Limit=[ W-2 wages of ($40,000 × 25% × 40%)]+ [Unadjusted basis of qualified property of ($0 × 2.5% × 40%)]

Tentative QBI based on the W-2 Wages/Capital Investment Limit=$4,000+$0

Tentative QBI based on the W-2 Wages/Capital Investment Limit=$4,000

Therefore their tentative QBI based on the W-2 Wages/Capital Investment Limit will be $8,000

2. Calculation to Determine their allowable QBI deduction for 2020

First step is to calculate the General QBI deduction

General QBI deduction [($300,000 × 20%)× 40%]

General QBI deduction=$24,000

Second step is to calculate the Reduction Ratio

Reduction ratio= ($386,600 - $326,600)/100,000

Reduction ratio=$60,000/100,000

Reduction ratio= 60%

Now let calculate the allowable QBI deduction for 2020

General QBI deduction $24,000

Less Reduction of W-2 Wages/Capital Investment Limit ($9,600)

[($24,000-$8,000)*60%]

2020 Allowable QBI deduction $14,400

($24,000-$9,600)

Therefore their allowable QBI deduction for 2020 will be $14,400

What are out-of-order rooms? How do they differ from out-of-inventory rooms

Apedwa Inc. recently purchased a new delivery truck. The new truck costs $25,000 and is expected to generate net after-tax operating cash flows, including depreciation, of $7,000 at the end of each year. The truck has a 5-year expected life. The expected abandonment values (salvage values after tax adjustments) at different points in time are given below. The firm's cost of capital is 10 percent. What is ithis project's optimal economic life?

Year Annual Operating Cash Flow Salvage Value
0 ($20,000) $20,000
1 7,000 16,000
2 7,000 14,000
3 7,000 12,000
4 7,000 8,000
5 7,000 0

Management at the Flagstaff Company currently sells its products for $250 per unit and is contemplating a 40% increase in the selling price for the next year. Variable costs are currently 30% of sales revenue and are not expected to change in dollar amount on a per unit basis next year (the company will still pay the same variable cost per unit). Fixed expenses are $120,000 per year. If fixed costs were to decrease 10% during the current year and the new selling price goes into effect, how many units will need to be sold to breakeven

Dwayne Wade Company recently signed a lease for a new office building, for a lease period of 10 years. Under the lease agreement, a security deposit of $12,000 is made, with the deposit to be returned at the expiration of the lease, with interest compounded at 5% per year.
What amount will the company receive at the time the lease expires?

Uptown Bank provides lockbox services. They estimate that you can reduce your average mail time by 2.2 days and your combined clearing and processing time by .75 days by implementing their system. Your firm receives 65 checks a day with an average value of $298 each. The current T-Bill rate is .01 percent per day. Assume a 365-day year. The bank will charge your firm $.15 per check. What is the annual net savings from installing this system?

Fultz Company has accumulated the following budget data for the year 2020.

1. Sales: 31,480 units, unit selling price $89.
2. Cost of one unit of finished goods: direct materials 1 pound at $5 per pound, direct labor 3 hours at $12 per hour, and manufacturing overhead $6 per direct labor hour.
3. Inventories (raw materials only): beginning, 10,270 pounds; ending, 15,380 pounds.
4. Selling and administrative expenses: $170,000; interest expense: $30,000.
5. Income taxes: 30% of income before income taxes.

Required:
a. Prepare a schedule showing the computation of cost of goods sold for 2020.
b. Prepare a budgeted multiple-step income statement for 2020.

In 2020, Bertha Jarow had a $28,000 loss from the sale of a personal residence. She also purchased from an individual inventor for $7,000 (and resold in two months for $18,000) a patent on a rubber bonding process. The patent had not yet been reduced to practice. Bertha purchased the patent as an investment. In addition, she had the following capital gains and losses from stock transactions:
Long-term capital loss ($6,000)
Long-term capital loss carryover from 2019 (12,000)
Short-term capital gain 21,000
Short-term capital loss (7,000)
A. Bertha has a net long-term capital loss of $___. Bertha has a net short-term capital gain of $ 14000. As a result, Bertha has an overall net short-term capital gain of $___.
B. Complete the letter to Bertha explaining the tax treatment of the sale of her personal residence. Assume Bertha's income from other sources puts her in the 28% bracket.

1. Which one of the items below is NOT a reason why CASH does not equal PROFIT?
A. Credit Sales
B. Credit Purchases
C. Cash Sales
D. Prepayments

Ring Me Up Inc. has net income of $143,100 for the year ended December 31, 2019. At the beginning of the year, 36,000 shares of common stock were outstanding. On May 1, an additional 18,000 shares were issued. On December 1, the company purchased 4,300 shares of its own common stock and held them as treasury stock until the end of the year. No other changes in common shares outstanding occurred during the year. During the year, Ring Me Up paid the annual dividend on the 9,000 shares of 4.65%, $100 par value preferred stock that were outstanding the entire year.

Required:
Calculate basic earnings per share of common stock for the year ended December 31, 2019.

The Fabricating Department started the current month with a beginning Work in Process inventory of $11,600. During the month, it was assigned the following costs: direct materials, $77,600; direct labor, $25,600; and factory overhead, 80% of direct labor cost. Also, inventory with a cost of $117,000 was transferred out of the department to the next phase in the process. The ending balance of the Work in Process Inventory account for the Fabricating Department is:

A mining company is evaluating when to open a gold mine. The mine has 100,000 ounces of gold left that can be mined and mining operations will produce 10,000 ounces per year. The price of gold from the mine will be guaranteed for the remaining life of the mine through the gold futures contracts. If the mine is opened today, each ounce of gold will generate an after-tax cash flow (= total or net cash flow) of $1,300 per ounce. If the company waits one year, there is a 70 percent probability that the contract price will generate an after-tax cash flow of $1,550 per ounce and a 30 percent probability that the after-tax cash flow will be $1,200 per ounce. The required return on the gold mine is 15 percent and it will cost $30,000,000 to open the mine regardless of whether the mine is open today or in one year. Compute the value of the option to wait today.

Lo-crete produces quick setting concrete mix. Production of 200,000 tons was started in April, 190,000 tons were completed. Material costs were $3,152,000 for the month while conversion costs were $591,000. There was no beginning work-in-process; the ending work-in-process was 70% complete. What is the cost of the product that was completed and transferred to finished goods

Bramble Company has the following equivalent units of production for July: materials 30200 and conversion costs 23500. Production cost data are:

Materials Conversion
Work in process, July 1 $6400 $2600
Costs added in July 54000 35000

The unit production costs for July are:

Materials Conversion Costs
a. $1.79 $1.60
b. $1.79 $1.49
c. $2.00 $1.49
d. $2.00 $1.60

Assume you are using the dividend growth model to value stocks. If you expect the inflation rate to increase, you should also expect: A. market value of all stocks to decrease, all else equal. B. market value of all stocks to remain constant as the dividend growth will offset the increase in inflation. C. stocks that do not pay dividends to decrease in price while dividend paying stocks maintain a constant price.

Luzadis Company makes furniture using the latest automated technology. The company uses a job-order costing system and applies manufacturing overhead cost to products on the basis of machine-hours. The predetermined overhead rate was based on a cost formula that estimates $1,152,000 of total manufacturing overhead for an estimated activity level of 72,000 machine-hours.During the year, a large quantity of furniture on the market resulted in cutting back production and a buildup of furniture in the company's warehouse. The company's cost records revealed the following actual cost and operating data for the year:,Machine-hours 67,000Manufacturing overhead cost $551,000 Inventories at year-end: Raw materials $13,000 Work in process (includes overhead applied of $37,520) $139,300 Finished goods (includes overhead applied of $101,840) $378,100 Cost of goods sold (includes overhead applied of $396, 640) $1,472,600Required: 1. Compute the underapplied or overapplied overhead. 2. Assume that the company closes any underapplied or overapplied overhead to Cost of Goods Sold. Prepare the appropriate journal entry. 3. Assume that the company allocates any underapplied or over appliedoverhead proportionally to Work in Process, Finished Goods, and Cost of Goods Sold. Prepare the appropriate journal entry. 4. How much higher or lower will net operating income be if the underapplied or overapplied overhead is allocated to Work in Process, Finished Goods, and Cost of Goods Sold rather than being closed to Cost of Goods Sold?

Which resources would be classified as a land factor of production?
A)
milk
B)
petroleum
C)
timber
D)
tractor
E)
workers

Started the business when it acquired $61,000 cash from the issue of common stock. Paid $21,300 cash to purchase inventory. Sold inventory costing $12,100 for $27,700 cash. Physically counted inventory; had inventory of $7,400 on hand at the end of the accounting period. Required a. Record the events in the T-accounts provided. b. Prepare an income statement and balance sheet.

8) Healthy Foods just paid its annual dividend of $1.62 a share. The firm recently 8) announced that all future dividends will be increased by 2.1 percent annually. What is one share of this stock worth to you if you require a rate of return of 15.7 percent

Marketers competing on product attributes and image are said to be participating in:

Ataxia Fitness Center is considering an investment in some additional weight training equipment. The equipment has an estimated useful life of 10 years with no salvage value at the end of the 10 years. Ataxia's internal rate of return on this equipment is 8%. Ataxia's discount rate is also 8%. The payback period on this equipment is closest to (Ignore income taxes.):

In 2013, Chirac Enterprises issued, at par, 75 $1,060, 8% bonds, each convertible into 200 shares of common stock. Chirac had revenues of $19,100 and expenses other than interest and taxes of $8,860 for 2014. (Assume that the tax rate is 40%.) Throughout 2014, 2,530 shares of common stock were outstanding; none of the bonds was converted or redeemed.(a) Compute diluted earnings per share for 2014. (Round answer to 2 decimal places, e.g. $2.55.)(b) Assume the same facts as those assumed for part (a), except that the 75 bonds were issued on September 1, 2014 (rather than in 2013), and none have been converted or redeemed. (Round answer to 2 decimal places, e.g. $2.55.)(c) Assume the same facts as assumed for part (a), except that 25 of the 75 bonds were actually converted on July 1, 2014. (Round answer to 2 decimal places, e.g. $2.55.)

Pine Corp. produces three products, and currently has a shortage of machine hours since one of its two machines is down. The selling price, costs, and machine time requirements of the three products are as follows: Product A Product B Product C Selling price$5.00 $3.00 $5.00 Variable cost per unit$3.50 $2.00 $2.00 Machine hours per unit 0.75 0.25 1 Pine has unlimited demand for all its products. Which product/s should Pine Corp. produce to maximize profit while the machine is down

A firm has production function y = f(x1, x2) = x 1^1/3 x 2 ^2/3 , where y is the amount of output, x1, x2 are the amount of input 1 and 2 respectively.
(a) Suppose the firms chooses to produce with inputs x1^0 , x2^0 . Calculate the marginal product with respect to input 1 and input 2. (Express them in terms of x1^0 , x2^0 .)
(b) What’s the firm’s technical rate of substitution given input level x1^0 , x2^0 ?
(c) Suppose the prices for input 1 and input 2 are are respectively w1 = 8, w2 = 2. The market price for the output is p = 50. In order to produce a fixed level of output y 0 = 8, what’s the optimal amount of each input that the firm chooses to use for production?

Your uncle just won the weekly lottery, receiving $375,000, which he invested at a 7.5% annual rate. He now has decided to retire, and he wants to withdraw $35,000 at the end of each year, starting at the end of this year. What is the maximum number of whole payments that can be withdrawn before the account is exhausted, i.e., before the account balance would become negative? (Hint: Round down to the nearest whole number.)

Portsmouth Company makes upholstered furniture. Its only variable cost is direct materials. The demand for the company's products far exceeds its manufacturing capacity. The bottleneck (or constraint) in the production process is upholstery labor-hours. Information concerning three of Portsmouth's products appears below: Recliner Sofa Love Seat Selling price per unit $ 1,270 $ 1,750 $ 1,190 Variable cost per unit $ 850 $ 1,200 $ 850 Upholstery labor-hours per unit 7 hours 10 hours 4 hoursRequired:
1. Portsmouth is considering paying its upholstery laborers additional compensation to work overtime. Assuming that this extra time would be used to produce sofas, up to how much of an overtime premium per hour should the company be willing to pay to keep the upholstery shop open after normal working hours?
2. A small nearby upholstering company has offered to upholster furniture for Portsmouth at a price of $44 per hour. The management of Portsmouth is confident that this upholstering company’s work is high quality and their craftsmen can work as quickly as Portsmouth’s own craftsmen on the simpler upholstering jobs such as the Love Seat. How much additional contribution margin per hour can Portsmouth earn if it provides the raw materials to the nearby company and then hires it to upholster the Love Seats?
3. Should Portsmouth hire the nearby upholstering company?

Sole Purpose Shoe Company is owned and operated by Sarah Charles. The company manufactures casual shoes, with manufacturing facilities in your state. Sarah began the business this year, and while she has a great deal of experience in manufacturing popular and comfortable shoes, she needs some help in evaluating her results for the year, and asks for your help.

Sarah’s first questions for you have to do with the general ideas and terminology used to evaluate variances.

1. Why might Sarah want to use standard costs to compare with her actual costs?

a. Management can evaluate the differences between standard costs and actual costs to focus on correcting the cost variances.
b. Standard costs give management a cost structure for products that is applicable for the entire life of the business.
c. Standard costs allow management to motivate employees by comparing their performance to what it would be under perfect conditions.

2. What are some possible drawbacks to using standard costs that Sarah might consider? Check all that apply.

a. Since standards are impossible to attain, they are a distraction from the work at hand.
b. Since standards never change, they do not reflect reality.
c. Standards limit operating improvements because employees may be discouraged from improving beyond the standards.
d. Employees may focus only on efficiency improvement and their own operations rather than considering the larger objectives of the organization.
e. Standards may become "stale" in a dynamic manufacturing environment.

High owns 60% of Low. In 2019, Low sold inventory (cost $70,000) to High for $100,000. 40% of this inventory was not sold to third parties by High until 2020. In 2020, Low sold inventory (cost $72,000) to High for $120,000. Of this inventory, $50,000 was not sold to third parties by High until 2021. In 2020, Low reports $70,000 of net income. What is the noncontrolling interest in 2020 income of Low. $24,800 $31,200 $37,200 $46,800

Which of the following will not create minimum contacts in a state sufficient to find personal jurisdiction on an out-of-state defendant? Group of answer choices A company maintains no physical office within a state and does not send sales personnel in to conduct business, but it target advertises in the forum state, providing special products and discounts for the forum state's residents. A company maintains an office in the forum state that is manned once a week by employees. A company sends sales personnel into the forum state to conduct business but does not maintain an office within the forum state. A company maintains a website that provides information about its products and that provides an address or number that a customer can contact to obtain an order form to purchase products directly from the company.

When we grow in relationship with ______________, we grow in relationship with God.

Calculate the required rate of return for Mudd Enterprises assuming that investors expect a 5.0% rate of inflation in the future. The real risk-free rate is 1.5%, and the market risk premium is 5.0%. Mudd has a beta of 1.5, and its realized rate of return has averaged 13.5% over the past 5 years. Round your answer to two decimal places.