ex
aws.vaio
Exam.docxName _____________________________________________ Bonus Exam -
READ Requirements Carefully!
1. Economic Nexus relates to
a) A new way for states to connect to transactions in order to collect tax
b) A way to research law related matters
c) A connection for sales tax transactions only
d) None of the above
2. ABC in order of transaction: purchases 5 units of inventory at a $1,000/unit. Then ABC purchases 4 units at $1,100/unit Then Sells 2 units of inventory at a price of $1,500/unit. The Lower of Cost or Market suggests a replacement cost at the balance sheet date of $1,050/unit. ABC uses perpetual LIFO. Book all entries
3. ABC manufacturers custom guitars for sale. ABC purchases a machine that will be used to shape guitars on 1/1/2018 for $300,000. The machine has a 6-year life with no salvage value. Book the entry on 1/1 and 12/31. The machine is only to be used in the manufacturing process.
4. ABC purchases 3 investments on 9/1/2018. Stock of BCD for $10,000 that has a fair–value of $13,000 at year-end. Bonds of BCD for $10,000 that have a fair value of $10,500 at year-end. These bonds are considered available for sale. Bonds of CDE Company which were purchased on a bond market for $6,000 that have a year-end fair value of $9,000. These bonds are being held to maturity. Sales for ABC are 120,000. The only expense is salaries for 55,000. Dividends are $500 and total bond revenues are $1,000. Assume a tax rate of 20%. Prepare an income statement (in good form) for ABC. Show investment account balance that would be shown on balance sheet at 12/31/18.
5. ABC owns 30% of D Company. ABC and D have the following: Revenues of $90,000/30,000; COGS $40,000/12,000; SGA 10,000/3,000. ABC pays a dividend of $10,,000 and D pays a dividend of 5,000. Tax rate of 20%. Prepare an income statement for ABC
6.
a. Brief ASC 2016-1 (1 page (minimum) document)
7. An exemption certificate
a) allows a transaction to be treated as taxable
b) allows a seller with nexus not to have to collect sales tax
c) allows a buyer to remit use tax
d) allows a transaction to be treated as non-taxable for income tax purposes
8. Mack Corporation, a U.S. corporation,
reported total taxable income of $5 million.
Taxable income included $1.5 (as translated)
million of foreign source taxable income from
a company’s branch. All of the branch income
is foreign branch income. Mack paid Canadian
income taxes of $375,000 (as translated) on its
branch income. Compute Mackinac’s
allowable foreign tax credit
9. ABC Corporation is domiciled in X jurisdiction. X
jurisdiction uses a double weighted sales to
determine apportionment. Sales to X jurisdiction is
250,000. Sales everywhere else is 1,180,637.
Rental in X cost us $100,000. Federal TI is $500,000
and there are no state adjustments to this amount.
$50,000 of the $500,000 is the total allocable
income but only $32,000 is allocable to jurisdiction
X. Jurisdiction X’s tax rate is 8.25%. What is state
tax payable to X?
10. Sales 480,000
COGS 40,000
Muni Interest revenue 20,000
Salaries 80,000
Rent expense 12,000
Supplies Expense 8,000
R&D expense 15,000
Depreciation 35,000 (for tax it is going to be $60,000)
Meals Expense 12,000
Dividend Revenue from a 10% owned company 20,000
Tax Rate is 21%
1. Prepare an income statement (per GAAP) in good format
