1. Polytech Inc. calculated its Net Income for its Dec. 31st 2019 yearend as follows: Revenues 1000000 Other income 100000

1. Polytech Inc. calculated its Net Income for its Dec. 31st, 2019, year-end as follows:
Revenues











$1,000,000
Other income











100,000
A
Expenses:
Cost of Goods Sold






($300,000)



B
Selling and Administrative Costs



(150,000)



C
Amortization Expense






(175,000)



D
Other Expenses







(125,000)

(750,000) E
Income Before Tax Expense








$350,000
Income Tax Expense:









(75,000)
Net Income











$275,000
Other Information:
A. Other income consists of a capital gain.
B. Cost of Goods Sold includes:
$ 15,000 in lower of cost or market adjustment
C. Selling and Administrative Costs includes:
$ 30,000 in club memberships for senior management
$ 1,000 in interest on late tax installments
D. Polytech Inc. amortizes the following assets:
· Building, 95
% manufacturing use, 5
% office use, with an ACB of $1.5 million and a UCC of $1.2 million on Jan. 1, 2019.
· Warehouse leased in 2014 for a 10-year term with an option for two 5-year renewals. Leaseholds improvements were made in 2014 for $100,000 and 2016 for $40,000.
· Manufacturing equipment (class 8) with a cost of $200,000 and a UCC on Jan. 1st, 2019, of $140,000. In December the company sold equipment for $500,000 which was originally purchased for $400,000. Replacement equipment was also purchased in December for $650,000.
E. Other Expenses include:
$ 4,000 in 2019 year-end bonuses, paid on July 1st, 2020
$ 2,000 in bond amortization
$ 4,000 in incorporation costs
(1) Calculate minimum Net Income For Tax Purposes for the year ended Dec. 31, 2019;
(2) End of year tax account balances.
(3) Explain adjustments to GAAP income and any amounts that are unadjusted.

Share This Post

Email
WhatsApp
Facebook
Twitter
LinkedIn
Pinterest
Reddit

Order a Similar Paper and get 15% Discount on your First Order

Related Questions

Obtain the general solution of the following DEs: i. y′′′ + y′′ − 4y′ + 2y = 0 ii. y(4) + 4y(2) = 0 iii. x(x − 2)y′′ + 2(x − 1)y′ − 2y = 0; use y1 = (1 − x) iv. y′′ − 4y = sin2(x) v. y′′ − 4y′ + 3y = x ; use y1 = e3x vi. y′′ + 5y′ + 6y = e2xcos(x) vii. y′′ + y = sec(x) tan(x)

Obtain the general solution of the following DEs: i. y′′′ + y′′ − 4y′ + 2y = 0 ii. y(4) + 4y(2) = 0 iii. x(x − 2)y′′ + 2(x − 1)y′ − 2y = 0; use y1 = (1 − x) iv. y′′ − 4y = sin2(x) v. y′′