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C12-Chp-01-3-Chapter 1 Class Exercises

C12-Chp-01-3-Chapter 1 Class Exercises - Page 1 of 1...

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8c400dce61c3f8fba3a30152043a7aaa5c87c09c.doc. Page 1 of 1 Chapter 1. What influences the development of the tax law? Wang Repair Corporation (First Year of Operation) Cash $29,000 Revenue $140,000 Accounts Receivable 20,000 Expenses: Allowance for doubtful accounts (3,000) 17,000 Salaries Expense-Owner 46,000 Equipment (5-year life) 10,000 Supplies Expense 18,000 Accumulated Depreciation (2,000) 8,000 Insurance & Utilities 9,000 Building & Land 200,000 Property Tax Expense 1,000 Accumulated Depreciation (4,000) 196,000 Interest Expense 10,000 Deferred Tax Asset 0 Depreciation Expense 6,000 Other Assets 50,000 50,000 Bad Debts Expense 4,000 Total Assets $300,000 Other Expense/Loss 6,000 Accounts Payable 10,000 Total Expense 100,000 Mortgage-10% (Due 2011) 100,000 Net Income before Tax 40,000 Income Tax Payable-Current 0 Income Tax Expense-Current 0 Deferred Tax Liability 0 Income Tax Expense-Deferred 0 Total Liabilities $110,000 Net Income after tax (loss) $40,000 Common Stock ($10 Par) 150,000 Retained Earnings - Begin. Balance 0 Retained Earnings 40,000 Subtotal 40,000 Stockholders' Equity 190,000 Less: Dividends Total Liabilities & Equity $300,000 Retained Earnings - Ending Balance 40,000 Corporation was organized by Mr. Wang on January 1, 2010. Mr. Wang owns all of the stock.
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