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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