C12-Chp-02-2-Homework-Sol-2012-Class-Blanks

C12-Chp-02-2-Homework-Sol-2012-Class-Blanks - Tab: Chapter...

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Tab: Chapter 2 File: be3a89cf9873a088af414ab3fe9ad9c6684971d2.xls Page 1 of 1 No Ans 5 Capital Facts gain or loss Ordinary Return Book income $120,000 $120,000 Loss on sale of building [S/L depreciation] (8,000) Gain on sale of land used in business 2,000 (This is ordinary loss and was deducted in book income) Loss on sale of stock (long-term) (1,000) (1,000) (This was deducted to get book income but is not deductible on tax return) Taxable Income 6 Charlotte Corporation Debit Credits Sales $700,000 Cost of sales $400,000 Municipal bond interest 2,000 Compensation 90,000 Meals and entertainment (Gross) 20,000 Payroll taxes, & Misc. Expense 140,000 Subtotal 650,000 702,000 Net Income (GAAP) before taxes Add: one half of entertainment Deduct: municipal bond interest Taxable income Income Tax 7 Facts Return Sales $500,000 Cost of sales and normal operating expenses 400,000 Interest income on municipal bonds 25,000 Capital loss on sale of temporary stock investments held 2 months
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This note was uploaded on 03/09/2012 for the course ACCT 6120 taught by Professor Godfrey,h during the Spring '08 term at UNC Charlotte.

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