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Graded Homework 1

Graded Homework 1 - ACC 470/570 Winter 2011 Graded Homework...

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ACC 470/570 Winter 2011 Graded Homework 1: This assignment is due in class on Thursday Wednesday January 26th. The assignment is to be completed individually. You may consult with classmates to discuss the problems, but each individual student must turn in a solution showing all work. The assignment is worth 15 points. Problem 1 Whirlwind Cycles is owned 100% by Daniel, a single taxpayer. Both Whirlwind Cycles and Daniel use the cash method of accounting for tax purposes. The business incurred the following items of income and expense in the year 2010: Cash Sales $225,000 Interest received from City of Eugene Bonds 3,000 Cost of Goods Sold (assume cash paid in 2010) 45,000 Cash payments for 2010 utilities 3,500 Cash payments for 2010 rent 18,000 Tax depreciation 40,000 Cash contribution to John Kitzhaber for Governor campaign (not deductible for tax purposes) 1,000 On 1/1/009 ( last year ) Whirlwind Cycles purchased a 60-month zero coupon bond with a 5% yield and a $20,000 maturity value for $15,670 (compounded annually).
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