Assignment 8 - Ch. 16.docx - Assignment 8(Chapter 16(Total...

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Assignment 8 (Chapter 16) (Total Possible Points: 100) ACCT 351/551 PLEASE SUBMIT THE ANSWER SHEET VIA BLACKBOARD. Provide supporting computations for partial credit. Round dollar amounts to the nearest cent ($3,500.0372 $3,500.04) and percentages to second decimal place (e.g. 35.0279% 35.03%). Throughout the problems, assume corporations are calendar year tax period, accrual method taxpayers. 1. ( 36 points total ) Assume the following businesses operate as corporations. For the year requested, determine the amount of book-tax difference, whether they are favorable or unfavorable, and whether they are permanent or temporary. ( 3 points for each dollar amount answer, 3 points for each favorable/unfavorable answer, and 3 points for each temporary/permanent answer ) Year of interes t Dollar amoun t Favorable or Unfavorabl e Temporary or Permanent Wine and Cheese Depot – Part 1 On November 30, 2017, a restaurant ordered $2,000 of wines and cheeses from the Wine and Cheese Depot. The products were dropped off in the first week of December (2016). The bill was due by January 31, 2018. On December 15, 2017, the restaurant told the Depot them that the restaurant may only be able to pay $1,000 of the final bill in 2018 as a food inspector was threatening to close the business down unless they made costly changes to the restaurant building. The restaurant owners were not sure the restaurant could afford the changes but were deliberating whether they could swing the costs to be able to keep their doors open. As a result, the Depot credited its allowance for doubtful accounts and debited bad debt expense for book purposes with the $1,000 difference in 2017. (Taxpayer of interest: the Depot) 2017 Wine and Cheese Depot – Part 2.

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