Question: Before Gordon Corporation engages in the treasury

> Wesley and Myrtle (ages 90 and 88, respectively) live in an assisted care facility and for the last two years received their support from the following sources. Percentage of Support Social Security benefits……………….…………………………………………..16% Son……………………

> Sam and Elizabeth Jefferson file a joint return. They have three children, all of whom qualify as dependents. If the Jeffersons report 2017 AGI of $335,900, what is their allowable deduction for personal and dependency exemptions?

> Jenny, age 14, lives in a household with her father, uncle, and grandmother. The household is maintained by the uncle. The parties, all of whom file their own Federal income tax returns, report AGI as follows: father ($30,000), uncle ($50,000), and grand

> Determine how many personal and dependency exemptions are available in each of the following independent situations. Specify whether any such exemptions would come under the qualifying child or the qualifying relative category. a. Andy maintains a househ

> Determine the number of personal and dependency exemptions in each of the following independent situations. No tax treaty provisions apply. a. Reginald, a U.S. citizen and resident, contributes 100% of the support of his parents, who are citizens of Cana

> Donna does not think she has an income tax problem but would like to discuss her situation with you just to make sure there is no unexpected tax liability. Base your suggestions on the following relevant financial information: a. Donna’s share of the SAT

> Determine the number of personal and dependency exemptions in each of the following independent situations. a. Leo and Amanda (ages 48 and 46, respectively) are married and furnish more than 50% of the support of their two children, Elton (age 18) and Tr

> Go to the U.S. Tax Court website (www.ustaxcourt.gov). a. What different types of cases can be found on the site? b. What is a Summary Opinion? Find one. c. What is a Memorandum Opinion? Find one

> Analyze each of the characteristics in considering the indicated test for dependency as a qualifying child or qualifying relative. For each of the last two columns, state whether the test is Met, Not Met, or Not Applicable (NA). Qualifying Child Tes

> (1) Go to www.taxalmanac.org, and use the website to find § 61(a). What is defined in this Code Section? Is the definition broad or narrow? (2) Go to www.legalbitstream.com, and find the case in which Mark Spitz, the former Olympic gold medalist, is the

> Jane, a tax practitioner, has reviewed the law on how State X’s income tax applies to a client’s web-based consulting business, but is unable to reach a conclusion for which she has a high level of confidence. Assuming Jane is a knowledgeable and experie

> Determine the amount of the 2017 standard deduction allowed in the following independent situations. In each case, assume that the taxpayer is claimed as another person’s dependent. a. Curtis, age 18, reports income as follows: $700 interest from a certi

> You are interviewing a client before preparing his tax return. He indicates that he did not list as income $96,000 received as a recovery for false imprisonment. What should you do with respect to this significant recovery? Partial list of research aids:

> Compute Aiden’s 2017 taxable income on the basis of the following information. Aiden is married but has not seen or heard from his wife for over three years. Salary ……………………………………………………………………………………………………………$ 80,000 Interest on bonds issued by City of Bo

> When Oprah gave away Pontiac G6 sedans to her TV audience, was the value of the cars taxable? On Labor Day weekend in 2006, World Furniture Mall in Plano, Illinois, gave away $275,000 of furniture because the Chicago Bears shut out the Green Bay Packers

> Compute Emily’s 2017 taxable income on the basis of the following information. Her filing status is single. Salary………………………………………………………………………………………………………………. $85,000 Interest income from bonds issued by Xerox………………………………………………………. 1,100 Alimony pa

> Research Problem 1. Determine the missing data in these court decisions and rulings. a. Higgens v. Comm., 312 U.S._____ (1941). b. Talen v. U.S., 355 F.Supp.2d 22 (D.Ct. D.C., ______). c. Rev.Rul. 2008–18, 2008–13 I.R.B.______. d. Pahl v. Comm., 150 F.3d

> Compute 2017 taxable income in each of the following independent situations. a. Drew and Meg, ages 40 and 41, respectively, are married and file a joint return. In addition to four dependent children, they have AGI of $65,000 and itemized deductions of $

> Using the legend provided, classify each of the following statements: a. Sue writes a $707 check for a charitable contribution on December 28, 2017, but does not mail the check to the charitable organization until January 10, 2018. She takes a deductio

> Several years ago, after a particularly fierce argument, Fran’s husband moved out and has not been heard from or seen since. Because Fran cannot locate her husband, she uses a “married, filing separate” income tax return. Comment on Fran’s Federal filing

> Using the legend provided, classify each of the following citations as to publisher: a. 83–2 USTC {9600. b. 52 AFTR 2d 83–5954. c. 67 T.C. 293 (1976). d. 39 TCM 32 (1979). e. 416 U.S. 938. f. RIA T.C. Memo. {80,582.

> In the citation Notice 90–20, 1990–1 C.B. 328, to what do the 20 and the 328 refer?

> Peter maintains a household in which live his 18-year-old son Kip and Kip’s wife Kerry. Although Peter provides most of their support, he does not claim them as dependents because Kip and Kerry file a joint return. Is Peter correct? Explain.

> Using the legend provided, classify each of the following tax sources: a. Sixteenth Amendment to the U.S. Constitution. b. Tax treaty between the United States and India. c. Revenue Procedure. d. An IRS publication. e. U.S. District Court decision. f.

> Logan B. Taylor is a widower whose wife, Sara, died on June 6, 2014. He lives at 4680 Dogwood Lane, Springfield, MO 65801. He is employed as a paralegal by a local law firm. For 2016, he reported the following receipts. In 2016, Logan inherited securit

> Rank the items below from most reliable to least reliable: a. Letter Ruling. b. Legislative Regulation. c. Code Section. d. Revenue Ruling. e. Proposed Regulation. f. Interpretive Regulation. g. Recent Temporary Regulation.

> Lance H. and Wanda B. Dean are married and live at 431 Yucca Drive, Santa Fe, NM 87501. Lance works for the convention bureau of the local Chamber of Commerce, while Wanda is employed part-time as a paralegal for a law firm. During 2016, the Deans record

> In which Subchapter of the Internal Revenue Code would one find information about corporate distributions? a. Subchapter S. b. Subchapter C. c. Subchapter P. d. Subchapter K. e. Subchapter M.

> Mark and Lisa were divorced last year. This year, Lisa has custody of their children, but Mark provides nearly all of their support. Who is entitled to claim the children as dependents?

> A large part of tax research consists of determining what?

> Isabella, Emma, and Jacob share equally in the support of their parents. Jacob tells his sisters that they should split the dependency exemptions among themselves. Explain what Jacob means.

> A mother sells a valuable collection of antiques to her daughter for $1,000. What judicial concept might the IRS invoke to question this transaction?

> How does the pay-as-you-go procedure apply to wage earners? To persons who have income from sources other than wages?

> Using information from this chapter as well as information from the tax agency in your state (likely called the Department of Revenue) and your local government, find all of the taxes to which a sole proprietor is subject. Create a table that lists all o

> The financial statements of P&G are presented in Appendix 5B or can be accessed at the book’s companion website, www.wiley.com/college/kieso. Instructions Refer to these financial statements and the accompanying notes to answer the following questions.

> Lois Kenseth, president of Sycamore Corporation, is concerned about several large stockholders who have been very vocal lately in their criticisms of her leadership. She thinks they might mount a campaign to have her removed as the corporation’s CEO. She

> Mask Company has 30,000 shares of $10 par value common stock authorized and 20,000 shares issued and outstanding. On August 15, 2012, Mask purchased 1,000 shares of treasury stock for $18 per share. Mask uses the cost method to account for treasury stock

> Kulikowski Inc., a client, is considering the authorization of a 10% common stock dividend to common stockholders. The financial vice president of Kulikowski wishes to discuss the accounting implications of such an authorization with you before the next

> The directors of Merchant Corporation are considering the issuance of a stock dividend. They have asked you to discuss the proposed action by answering the following questions. Instructions (a) What is a stock dividend? How is a stock dividend distingui

> Statements of Financial Accounting Concepts set forth financial accounting and reporting objectives and fundamentals that will be used by the Financial Accounting Standards Board in developing standards. Concepts Statement No. 6 defines various elements

> Penn Company was formed on July 1, 2010. It was authorized to issue 300,000 shares of $10 par value common stock and 100,000 shares of 8% $25 par value, cumulative and nonparticipating preferred stock. Penn Company has a July 1–June 30

> Earnhart Corporation has outstanding 3,000,000 shares of common stock of a par value of $10 each. The balance in its Retained Earnings account at January 1, 2012, was $24,000,000, and it then had Paid-in Capital in Excess of Par—Common Stock of $5,000,00

> Oregon Inc. $10 par common stock is selling for $110 per share. Four million shares are currently issued and outstanding. The board of directors wishes to stimulate interest in Oregon common stock before a forthcoming stock issue but does not wish to dis

> Distinguish among: cash dividends, property dividends, liquidating dividends, and stock dividends.

> Angela Corporation issues 2,000 convertible bonds at January 1, 2011. The bonds have a three-year life, and are issued at par with a face value of $1,000 per bond, giving total proceeds of $2,000,000. Interest is payable annually at 6 percent. Each bond

> The following is a summary of all relevant transactions of Vicario Corporation since it was organized in 2012. In 2012, 15,000 shares were authorized and 7,000 shares of common stock ($50 par value) were issued at a price of $57. In 2013, 1,000 shares we

> Myers Company provides you with the following condensed balance sheet information. Instructions For each transaction below, indicate the dollar impact (if any) on the following five items: (1) Total assets, (2) Common stock, (3) Paid-in capital in exce

> The books of Conchita Corporation carried the following account balances as of December 31, 2012. Cash …………………………………………………………………………………………………… $ 195,000 Preferred Stock (6% cumulative, nonparticipating, $50 par) ……………………… 300,000 Common Stock (no-par valu

> Washington Company has the following stockholders’ equity accounts at December 31, 2012. Common Stock ($100 par value, authorized 8,000 shares) ………… $480,000 Retained Earnings ……………………………………………………………………… 294,000 Instructions (a) Prepare entries in journ

> Seles Corporation’s charter authorized issuance of 100,000 shares of $10 par value common stock and 50,000 shares of $50 preferred stock. The following transactions involving the issuance of shares of stock were completed. Each transaction is independent

> Hatch Company has two classes of capital stock outstanding: 8%, $20 par preferred and $5 par common. At December 31, 2012, the following accounts were included in stockholders’ equity. Preferred Stock, 150,000 shares …………………………………….. $ 3,000,000 Common S

> Clemson Company had the following stockholders’ equity as of January 1, 2012. Common stock, $5 par value, 20,000 shares issued …………………….. $100,000 Paid-in capital in excess of par—common stock …………………………….. 300,000 Retained earnings ………………………………………………………

> On January 5, 2012, Phelps Corporation received a charter granting the right to issue 5,000 shares of $100 par value, 8% cumulative and nonparticipating preferred stock, and 50,000 shares of $10 par value common stock. It then completed these transaction

> Hagar Company has outstanding 2,500 shares of $100 par, 6% preferred stock and 15,000 shares of $10 par value common. The schedule below shows the amount of dividends paid out over the last 4 years. Instructions Allocate the dividends to each type of st

> Petrenko Corporation has outstanding 2,000 $1,000 bonds, each convertible into 50 shares of $10 par value ordinary shares. The bonds are converted on December 31, 2012. The bonds payable has a carrying value of $1,950,000 and conversion equity of $20,000

> Explain how convertible securities are determined to be potentially dilutive common shares and how those convertible securities that are not considered to be potentially dilutive common shares enter into the determination of earnings per share data.

> Martinez Company’s ledger shows the following balances on December 31, 2012. Preferred Stock (5%; $10 par value, outstanding 20,000 shares) ………….. $ 200,000 Common Stock ($100 par value, outstanding 30,000 shares) ………………. 3,000,000 Retained Earnings …………

> The outstanding capital stock of Pennington Corporation consists of 2,000 shares of $100 par value, 6% preferred, and 5,000 shares of $50 par value common. Instructions Assuming that the company has retained earnings of $70,000, all of which is to be pa

> Presented below is information from the annual report of Potter Plastics, Inc. Operating income ……………………………… $ 532,150 Bond interest expense ………………………….. 135,000 …………………………………………………………… 397,150 Income taxes ………………………………………. 183,432 Net income ……………………………

> Shown below is the liabilities and stockholders’ equity section of the balance sheet for Ingalls Company and Wilder Company. Each has assets totaling $4,200,000. For the year, each company has earned the same income before interest an

> Elizabeth Company reported the following amounts in the stockholders’ equity section of its December 31, 2012, balance sheet. Preferred stock, 8%, $100 par (10,000 shares authorized, 2,000 shares issued) ……. $200,000 Common stock, $5 par (100,000 shares

> Teller Corporation’s post-closing trial balance at December 31, 2012, was as follows. At December 31, 2012, Teller had the following number of common and preferred shares. The dividends on preferred stock are $4 cumulative. In addit

> The following information has been taken from the ledger accounts of Sampras Corporation. Total income since incorporation ……………………………………. $287,000 Total cash dividends paid …………………………………………………… 60,000 Total value of stock dividends distributed ………………………

> The following data were taken from the balance sheet accounts of Wickham Corporation on December 31, 2012. Current assets …………………………………………………………….. $540,000 Debt investments ………………………………………………………….. 624,000 Common stock (par value $10) ………………………………………. 6

> The stockholders’ equity accounts of Lawrence Company have the following balances on December 31, 2012. Common stock, $10 par, 200,000 shares issued and outstanding ……………. $2,000,000 Paid-in capital in excess of par—common stock ………………………………………… 1,200,00

> Teller Corporation’s post-closing trial balance at December 31, 2012, was as follows. At December 31, 2012, Teller had the following number of ordinary and preference shares. The dividends on preference shares are $4 cumulative. In

> The common stock of Warner Inc. is currently selling at $110 per share. The directors wish to reduce the share price and increase share volume prior to a new issue. The per share par value is $10; book value is $70 per share. Five million shares are issu

> What are the principal considerations of a board of directors in making decisions involving dividend declarations? Discuss briefly.

> Addison Corporation has 10 million shares of common stock issued and outstanding. On June 1, the board of directors voted a 60 cents per share cash dividend to stockholders of record as of June 14, payable June 30. Instructions (a) Prepare the journal e

> The following are selected transactions that may affect stockholders’ equity. 1. Recorded accrued interest earned on a note receivable. 2. Declared and distributed a stock split. 3. Declared a cash dividend. 4. Recorded a retained earni

> For a recent 2-year period, the balance sheet of Franklin Company showed the following stockholders’ equity data at December 31 in millions. Instructions (a) Answer the following questions. (1) What is the par value of the common stoc

> Davison Inc. recently hired a new accountant with extensive experience in accounting for partnerships. Because of the pressure of the new job, the accountant was unable to review what he had learned earlier about corporation accounting. During the first

> Weisberg Corporation has 10,000 shares of $100 par value, 6% preferred stock and 50,000 shares of $10 par value common stock outstanding at December 31, 2012. Instructions Answer the questions in each of the following independent situations. (a) If the

> Sanborn Company has outstanding 40,000 shares of $5 par common stock which had been issued at $30 per share. Sanborn then entered into the following transactions. 1. Purchased 5,000 treasury shares at $45 per share. 2. Resold 500 of the treasury shares a

> Loxley Corporation is authorized to issue 50,000 shares of $10 par value common stock. During 2012, Loxley took part in the following selected transactions. 1. Issued 5,000 shares of stock at $45 per share, less costs related to the issuance of the stock

> Hartman Inc. issues 500 shares of $10 par value common stock and 100 shares of $100 par value preferred stock for a lump sum of $100,000. Instructions (a) Prepare the journal entry for the issuance when the market price of the common shares is $168 each

> Cordero Corporation has an employee share-purchase plan which permits all full-time employees to purchase 10 ordinary shares on the third anniversary of their employment and an additional 15 shares on each subsequent anniversary date. The purchase price

> Fogelberg Corporation is a regional company which is an SEC registrant. The corporation’s securities are thinly traded on NASDAQ (National Association of Securities Dealers Quotes). Fogelberg has issued 10,000 units. Each unit consists of a $500 par, 12%

> Twenty-five thousand shares reacquired by Pierce Corporation for $48 per share were exchanged for undeveloped land that has an appraised value of $1,700,000. At the time of the exchange, the common stock was trading at $60 per share on an organized excha

> What are the computational guidelines for determining whether a convertible security is to be reported as part of diluted earnings per share?

> Abernathy Corporation was organized on January 1, 2012. It is authorized to issue 10,000 shares of 8%, $50 par value preferred stock, and 500,000 shares of no-par common stock with a stated value of $2 per share. The following stock transactions were com

> During its first year of operations, Sitwell Corporation had the following transactions pertaining to its common stock. Jan. 10 Issued 80,000 shares for cash at $6 per share. Mar. 1 Issued 5,000 shares to attorneys in payment of a bill for $35,000 for se

> Nottebart Corporation has outstanding 10,000 shares of $100 par value, 6% preferred stock and 60,000 shares of $10 par value common stock. The preferred stock was issued in January 2012, and no dividends were declared in 2012 or 2013. In 2014, Nottebart

> Use the information from BE15-13, but assume Green Day Corporation declared a 100% stock dividend rather than a 5% stock dividend. Prepare the journal entries for both the date of declaration and the date of distribution. In BE15-13 Green Day Corporatio

> Green Day Corporation has outstanding 400,000 shares of $10 par value common stock. The corporation declares a 5% stock dividend when the fair value of the stock is $65 per share. Prepare the journal entries for Green Day Corporation for both the date of

> Graves Mining Company declared, on April 20, a dividend of $500,000 payable on June 1. Of this amount, $125,000 is a return of capital. Prepare the April 20 and June 1 entries for Graves.

> Cole Inc. owns shares of Marlin Corporation stock classified as available-for-sale securities. At December 31, 2012, the available-for-sale securities were carried in Cole’s accounting records at their cost of $875,000, which equals their fair value. On

> Ravonette Corporation issued 300 shares of $10 par value ordinary shares and 100 shares of $50 par value preference shares for a lump sum of $13,500. The ordinary shares have a market price of $20 per share, and the preference shares have a market price

> Woolford Inc. declared a cash dividend of $1.00 per share on its 2 million outstanding shares. The dividend was declared on August 1, payable on September 9 to all stockholders of record on August 15. Prepare all journal entries necessary on those three

> Hinges Corporation issued 500 shares of $100 par value preferred stock for $61,500. Prepare Hinges’s journal entry.

> Arantxa Corporation has outstanding 20,000 shares of $5 par value common stock. On August 1, 2012, Arantxa reacquired 200 shares at $80 per share. On November 1, Arantxa reissued the 200 shares at $70 per share. Arantxa had no previous treasury stock tra

> Indicate how each of the following accounts should be classified in the equity section. (a) Share Capital—Ordinary (b) Retained Earnings (c) Share Premium—Ordinary (d) Treasury Shares (e) Share Premium—Treasury (f) Share Capital—Preference (g) Accumulate

> Explain each of the following terms: authorized ordinary shares, unissued ordinary shares, issued ordinary shares, outstanding ordinary shares, and treasury shares.

> Mary Tokar is comparing a GAAP-based company to a company that uses IFRS. Both companies report equity investments. The IFRS company reports unrealized losses on these investments under the heading “Reserves” in its equity section. However, Mary can find

> Briefly discuss the implications of the financial statement presentation project for the reporting of stockholders’ equity.

> In this simulation, you are asked to address questions related to the accounting for stock options and earnings per share computations. Prepare responses to all parts. KWW_Professional_Simulation Stock Options and EPS Time Remaining 3 hours 50 minut

> Richardson Company is contemplating the establishment of a share-based compensation plan to provide long-run incentives for its top management. However, members of the compensation committee of the board of directors have voiced some concerns about adopt

> On January 1, 2011, Garner issued 10-year, $200,000 face value, 6% bonds at par. Each $1,000 bond is convertible into 30 shares of Garner $2 par value common stock. The company has had 10,000 shares of common stock (and no preferred stock) outstanding th

> Sepracor, Inc., a drug company, reported the following information. The company prepares its financial statements in accordance with GAAP. __________________________2007 (,000) Current liabilities …………………………………… $ 554,114 Convertible subordinated debt ……

> Briggs and Stratton recently reported unamortized debt issue costs of $5.1 million. How should the costs of issuing these bonds be accounted for and classified in the financial statements?