Determine taxable income. Show all adjustments in the Microsoft Excel spreadsheet. Footnote references are provided to...
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Determine taxable income. Show all adjustments in the Microsoft® Excel® spreadsheet. Footnote references are provided to assist you. 1. 2. The Dr. has filed his prior tax returns on the cash basis. a. What questions will you ask be sure he can continue to file on the cash basis? 3. You find that in 2014, the Dr. qualifies, and choose to file on the cash basis. His books are kept on the accrual basis. Determine the adjustments needed. 4. No federal taxes were paid in 2013, and no estimated taxes were paid in 2014. 5. Within the state tax expense, you find $4,389 is late payment penalties. 6. While analyzing the financial information, you find that hidden in "Accounts Payable" is $28,953 of accrued salaries. You also find that the salaries were paid in the first week of February. a. Does this have an impact on taxable income? 7. Determine the accrual to cash adjustments for accounts receivable and accounts payable. 8. A charitable contribution carryforward of $40,000 is available. Included in insurance expense is $12,523 of officers' life insurance. You determine the company is the beneficiary, and each officer is a greater than 20% shareholder. Tax Adjustments a b U d 4 Accrual to Cash Adjustment - Accounts Receivable Charitable contributions carryover 50% Meals and Entertainment Non-deductible penalties Tax Exempt interest Accrual to Cash Adjustment - Accounts Payable 2 3 43700 Fee for Service Income 4 47300 Refunds 5 60000 Advertising and Promotion 6 60200 Automobile Expense 7 60400 Bank Service Charges 8 61000 Business Licenses and Permits 9 61100 Charitable Contributions (Cash) 0 61700 - Computer and Internet Expenses 1 62400 Depreciation Expense 2 62500 - Dues and Subscriptions 3 62600 - Equipment Rental 4 62600 - Equipment Rental:62610 Laser Facility Rent 5 63300 Insurance Expense 6 63400 Interest Expense 7 63600 Laboratory Testing Fees 8 64300 Meals and Entertainment 9 64400 Medical Records and Supplies 20 66700 Professional Fees 21 67200 Repairs and Maintenance 22 67800 Salaries and Wages Salaries and Wages:67810 Officer Compensation 23 67800 24 68000 25 68000 Taxes:68020 State Tax Tax Exempt Interest Taxes:68010 Payroll Taxes 26 70222 27 70300 Sublease Rents 28 71000 Dividends 29 75000 Gain on Sale of Assets 50 M-1 Accrual to Cash - Accounts Payable Debit 17633 1252 11961 8808 5611 60000 13575 628702 8327 201106 14979 55356 63678 121653 16725 103456 123945 18855 321580 940000 206103 35041 Credit 5050583 17621 240000 80000 75000 0 b e Debit HL. a C d Credit Determine taxable income. Show all adjustments in the Microsoft® Excel® spreadsheet. Footnote references are provided to assist you. 1. 2. The Dr. has filed his prior tax returns on the cash basis. a. What questions will you ask be sure he can continue to file on the cash basis? 3. You find that in 2014, the Dr. qualifies, and choose to file on the cash basis. His books are kept on the accrual basis. Determine the adjustments needed. 4. No federal taxes were paid in 2013, and no estimated taxes were paid in 2014. 5. Within the state tax expense, you find $4,389 is late payment penalties. 6. While analyzing the financial information, you find that hidden in "Accounts Payable" is $28,953 of accrued salaries. You also find that the salaries were paid in the first week of February. a. Does this have an impact on taxable income? 7. Determine the accrual to cash adjustments for accounts receivable and accounts payable. 8. A charitable contribution carryforward of $40,000 is available. Included in insurance expense is $12,523 of officers' life insurance. You determine the company is the beneficiary, and each officer is a greater than 20% shareholder. Tax Adjustments a b U d 4 Accrual to Cash Adjustment - Accounts Receivable Charitable contributions carryover 50% Meals and Entertainment Non-deductible penalties Tax Exempt interest Accrual to Cash Adjustment - Accounts Payable 2 3 43700 Fee for Service Income 4 47300 Refunds 5 60000 Advertising and Promotion 6 60200 Automobile Expense 7 60400 Bank Service Charges 8 61000 Business Licenses and Permits 9 61100 Charitable Contributions (Cash) 0 61700 - Computer and Internet Expenses 1 62400 Depreciation Expense 2 62500 - Dues and Subscriptions 3 62600 - Equipment Rental 4 62600 - Equipment Rental:62610 Laser Facility Rent 5 63300 Insurance Expense 6 63400 Interest Expense 7 63600 Laboratory Testing Fees 8 64300 Meals and Entertainment 9 64400 Medical Records and Supplies 20 66700 Professional Fees 21 67200 Repairs and Maintenance 22 67800 Salaries and Wages Salaries and Wages:67810 Officer Compensation 23 67800 24 68000 25 68000 Taxes:68020 State Tax Tax Exempt Interest Taxes:68010 Payroll Taxes 26 70222 27 70300 Sublease Rents 28 71000 Dividends 29 75000 Gain on Sale of Assets 50 M-1 Accrual to Cash - Accounts Payable Debit 17633 1252 11961 8808 5611 60000 13575 628702 8327 201106 14979 55356 63678 121653 16725 103456 123945 18855 321580 940000 206103 35041 Credit 5050583 17621 240000 80000 75000 0 b e Debit HL. a C d Credit
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