Assume that Smith Corporation will need to purchase 200,000 British pounds in 90 days. A call option exists on British pounds with an exercise price of $1.68, a 90day expiration date, and a premium of $.04. A put option exists…
1. Mike and Mary Jane Lee have a yearly income of $65,000 and own a house worth $90,000, two cars worth a total of $20,000, and furniture worth $10,000. The house has a mortgage of $50,000 and the cars have…
Hathaway, Inc. sponsors a defined-benefit pension plan. The following data relates to the plan for 2013: Contributions to the plan, $450,000; Service cost, $500,000; Interest on projected benefit obligation, $445,000; Amortization of prior service cost due to increase in benefits,…
Mr. and Mrs. Birch are both over 65 years of age and are filing a joint return. Their income for the current year consisted of the following: Taxable interest: $6,000Taxable dividends: $8,000Social Security payments (Mr. and Mrs. Birch combined): $15,000Tax-exempt…
Jack and Jill each own one-half of the stock of JJ Corporation, which corporation has earnings and profits of $15,000. JJ Corporation distributed to its two shareholders property with a total fair market value of $24,000 and an adjusted basis…
Given: balance Jan1………$290,000Debit entries………$125,000Credit entries…….($140,000)Balance, Dec 31…..=$275,000 In addition the company’s income statement includes a 35,000 loss on sales of marketable securities. None of the company’s marketable securities are considered a cash equivalent. Compute the amounts that should appear in…
During the current year, Larry sustained a serious injury in the course of his employment. As a result of the injury sustained, he received the following payments during the year. Compensation for loss of income $7,000 Worker’s compensation $4,500 Reimbursement…
Pamela owns a passive activity acquired several years ago that has incurred losses since its acquisition. This is the only passive activity she has ever owned. How will these passive losses affect Pamela’s tax computation when she disposes of the…
On July 1, 2013, Wilshire Corporation acquired 500, $1,000, 8% bonds at 96 plus accrued interest. The bonds were dated April 1, 2013, and mature on March 31, 2018, with interest paid each September 30 and March 31. The bonds…
Bonds with the following characteristics are retired on January 1, 2005, at 104: Issue date: January 1, 2004; maturity date: January 1, 2009; face value: $300,000; bond issue costs: $5,000, amortized semiannually using the straight-line method of amortization. The unamortized…
