Analyze each scenario presented below: Scenario 1 Bruce Ellis, a 34-year-old entrepreneur, navigated a dynamic financial landscape
Question:
Analyze each scenario presented below:
Scenario 1
Bruce Ellis, a 34-year-old entrepreneur, navigated a dynamic financial landscape in 2022 with the following transactions:
Transaction Amount ($) Sales 515,000.00 Purchase 185,500.00 Final inventory 130,750.00 Beginning inventory 165,000.00
Bills: Expense category Amount ($) Salaries 19,200.00 Payroll expenses 7,790.00 Repair and maintenance 4,860.00 Insurance expenses 7,080.00 Rental expenses 48,500.00 Utility expenses 14,380.00 Advertising expenses 29,300.00 Professional fee expenses 48,900.00
Additional Information:
In 2022, Bruce made estimated payments of $51,375 and contributed $9,150 to Social Security. His 33-year-old wife earned $75,500 with $6,550 withheld for income taxes. Both Bruce and his wife opened an IRA account, contributing $6,000 each.
The task is to complete Form 1040, Schedule C, and Form 6251 based on this financial data.
Scenario 2
Joseph Ford, a 38-year-old businessman in the hardware industry, made several transactions during 2022:
Transaction Amount ($)
Sales 485,000.00 Purchase 155,650.00 Final inventory 129,250.00 Beginning inventory 146,100.00
Bills: Expense category Amount ($) Salaries 18,200.00 Payroll expenses 8,790.00 Repair and maintenance 5,860.00 Insurance expenses 8,180.00 Rental expenses 45,550.00 Utility expenses 12,680.00 Advertising expenses 27,800.00 Professional fee expenses 46,900.00
Additional Information:
In 2022, Joseph made estimated payments of $49,475 and contributed $8,350 to Social Security. His 32-year-old wife earned $55,800, of which $4,585 was withheld for income tax. Both Jos and his wife opened an IRA account, contributing $6,500 each.
The task is to complete Form 1040, Schedule C, and Form 6251 based on this financial data.
Financial Accounting Tools for Business Decision Making
ISBN: 978-1118024492
5th Canadian edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine