Chapter 1 HW Solutions

Chapter 1 HW Solutions - 18 Taxable Income Solution Taxable...

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18. Taxable Income Solution: Taxable income = $49,000 $450,000 Gross receipts minus 145,00 0 Cost of goods sold equals $305,000 Gross income plus 20,00 0 Gain on sale minus 276,00 0 Expenses equals $49,000 Taxable income The $500 interest on State of New York bonds is tax-exempt. 20. Taxable Income Solution : Taxable income = $70,400 George's salary $60,000 plus Mary's salary 40,000 equals AGI $100,000 minus Itemized deductions 15,000 minus Standard deduction 0 minus 14,600 equals Taxable income $70,400 23. Determining Tax Liability Solution: Taxable income = $49,000; income tax = $7,350. Income Tax: $49,000 x 15% = $7,350. 25. Determining Tax Liability Solution: They save $900 ($10,862.50 - $9,962.50) by itemizing their deductions. Taxable income with itemizing = $70,400; Taxable income taking standard deduction = $74,000 ($100,000 in salaries - $11,400 standard deduction - $14,600 exemptions). Income Tax Calculation:
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This note was uploaded on 02/26/2012 for the course ACTG 470 taught by Professor Staff during the Spring '10 term at Oregon.

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Chapter 1 HW Solutions - 18 Taxable Income Solution Taxable...

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