Joyce Ingalls is the daughter of the late Fred Ingalls, who died Aug 15,2010. One of the items included in his gross estate was a traditional(regular/non-Roth) IRA valued at several million dollars. Mr.Ingalls’s estate will owe taxes, but no estate taxes had been paid by March 1.2011, the date Joyce filed her 2010 was a $50,000distribution from her father’s IRA. After talking with a friend , she wonders whether a Sec.691(c) deduction was available on her 2010 return, and she has contracted you to resolve this issue. write a memo in which you adrress whether Joyce is entitled to claim a Sec.681(c) deduction for income in respect of a decedent (IRD) she collected, given that no estate tac has yet been paid on the IRD or any other inclusion in her father’s gross estate. Also address in a conceptual manner how the deduction, assuming it is available, is calculated. At a minimum you should consult the following sources:IRC Sec. 691(c)FSA 200011023

 

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Joy Cunningham Co. purchased a machine on January 1, 2012, for $449,900. At that time, it was estimated that the machine would have a 10-year life and no salvage value. On December 31, 2015, the firm’s accountant found that the entry for depreciation expense had been omitted in 2013. In addition, management has informed the accountant that the company plans to switch to straight-line depreciation, starting with the year 2015. At present, the company uses the sum-of-the-years’-digits method for depreciating equipment.

Prepare the general journal entries that should be made at December 31, 2015, to record these events. (Ignore tax effects.)

 

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Journalizing transactions, posting to T-accounts, and preparing a trial balance

Problem P2-41 continues with the consulting business begun in Problem P1-54 in

Chapter 1. Here you will account for Daniels Consulting’s transactions as it is actually

done in practice.

Daniels Consulting completed the following transactions during December 2016:

Dec. 2 Daniels contributed $20,000 cash in exchange for capital.

2 Paid monthly office rent, $2,000.

3 Paid cash for a computer, $3,600. This equipment is expected to remain in service

for five years.

4 Purchased office furniture on account, $3,000. The furniture should last for

five years.

5 Purchased office supplies on account, $800.

9 Performed consulting service for a client on account, $2,500.

12 Paid utilities expenses, $150.

18 Performed service for a client and received cash of $2,100.

21 Received $2,400 in advance for client service to be performed in the future.

21 Hired an administrative assistant to be paid $2,055 on the 20th day of each

month. The secretary begins work immediately.

26 Paid $200 on account.

28 Collected $400 on account.

30 Daniels withdrew $1,000.

Requirements

1. Journalize the transactions, using the following accounts: Cash; Accounts

Receivable; Office Supplies; Equipment; Furniture; Accounts Payable; Unearned

Revenue; Daniels, Capital; Daniels, Withdrawals; Service Revenue; Rent Expense;

and Utilities Expense. Explanations are not required.

2. Open a T-account for each of the accounts.

3. Post the journal entries to the T-accounts, and calculate account balances. Formal

posting references are not required.

4. Prepare trial balance as of December 31, 2016.

5. Prepare the income statement of Daniels Consulting for the month ended

December 31, 2016.

6. Prepare the statement of owner’s equity for the month ended December 31, 2016.

7. Prepare the balance sheet as of December 31, 2016.

8. Calculate the debt ratio for Daniels Consulting at December 31, 2016.

 

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Journalize the following merchandising transactions for CSI Systems assuming it uses (a) a periodic inventory system and (b) a perpetual inventory system.1. On November 1, CSI Systems purchases merchandise for $1,400on credit with terms of 2/5, n/30, FOB shipping point; invoice datedNovember 1.2. On November 5, CSI Systems pays cash for the November 1 purchase.3. On November 7, CSI Systems discovers and returns $100 of defectivemerchandise purchased on November 1 for a cash refund.4. On November 10, CSI Systems pays $80 cash for transportationcosts with the November 1 purchase.5. On November 13, CSI Systems sells merchandise for $1,500on credit. The cost of the merchandise is $750.6. On November 16, the customer returns merchandise from theNovember 13 transaction. The returned items sell for $200 and cost $100.

 

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