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Tax Implications and Church Report

   

Added on  2020-04-21

8 Pages998 Words50 Views
1 Name:Course Professor’s nameUniversity nameCity, StateDate of submission

2Question 11.How would you treat the income from book sales? The book sales income from the visiting pastors will be treated differently from the books of the church. The visiting pastor presumably has his own church where the book sales income will be recorded. However, if the books were donated by the pastor to the church, they will be recorded as income to the church. In this case, the donations have not been done and therefore no income will be recorded in the income statement (Horngren, 2014).2.Why, would you take that approach?The approach is taken because the income does not belong to the church. The visiting pastor has a different church and therefore, the sales income of the books will be recorded in the books of his church and not in the visiting church. This is because the income belongs to another church although the sales were made in the church.3.What do you think the Tax implications may be?There are no tax implications on the church. This is because there are no recording to be documented on the income statement of the church. There will be no tax impact either increase or decrease in income. Question 2:Cost cut calculates the annual straight-line depreciation for the machine as:

31.Purchase cost of $600,000 – estimated salvage value of $50,000 = Depreciable asset cost of $550,000.2.1 / 5-year useful life = 20% depreciation rate per year.3.20% depreciation rate x $550,000 Depreciation cost= $110,000Question 3: Apply cash accounting to calculate the first-year profit of Benson Pty Ltd. The difference between cash and accrual methods of accounting is the timing when expenses andrevenues are recorded.Cash accounting methodAmount($)Amount($)Revenue earned136000Less : ExpensesCash expenses(40000)Profit96000a.Apply accrual accounting to calculate the first-year profit of Benson Pty Ltd. Accrual accounting

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