The uniform capitalization method must be used by I. Manufacturers of tangible personal property. II. Retailers of personal property with $2 million dollars in average annual gross receipts for the three preceding years.

The uniform capitalization method must be used by
I. Manufacturers of tangible personal property.
II. Retailers of personal property with $2 million dollars in average annual gross receipts for the three preceding years.

a. I only.
b. II only.
c. Both I and II.
d. Neither I nor II.





Answer: C

Which of the following taxpayers may use the cash method of accounting for tax purposes?

Which of the following taxpayers may use the cash method of accounting for tax purposes?

a. Partnership that is designated as a tax shelter.
b. Retail store with $2 million inventory, and $9 million average annual gross receipts.
c. An international accounting firm.
d. C corporation manufacturing exercise equipment with average annual gross receipts of $8 million.





Answer: C

Dr. Berger, a physician, reports on the cash basis. The following items pertain to Dr. Berger's medical practice in 2014: - Cash received from patients in 2014: $200,000 - Cash received in 2014 from third-party reimburser for services provided by Dr. Berger in 2013: $30,000 - Salaries paid to employees in 2014 : $20,000 - Year-end 2014 bonuses paid to employees in 2015: $1,000 - Other expenses paid in 2014: $24,000 What is Dr. Berger's net inocme for 2014 from his medical practice?

Dr. Berger, a physician, reports on the cash basis. The following items pertain to Dr. Berger's medical practice in 2014:
- Cash received from patients in 2014: $200,000
- Cash received in 2014 from third-party reimburser for services provided by Dr. Berger in 2013: $30,000
- Salaries paid to employees in 2014 : $20,000
- Year-end 2014 bonuses paid to employees in 2015: $1,000
- Other expenses paid in 2014: $24,000
What is Dr. Berger's net inocme for 2014 from his medical practice?

a. $155,000
b. $156,000
c. $185,000
d. $186,000




Answer: D

Alex Burg, a cash-basis taxpayer, earned an annual salary of $80,000 at Ace Corp. In 2014, but elected to take only $50,000. Ace, which was financially able to pay Burg's full salary, credited the unpaid balance of $30,000 to Burg's account on the corporate books in 2014, and actually paid this $30,000 to Burg on January 30, 2015. How much of the salary is taxable to Burg in 2014?

Alex Burg, a cash-basis taxpayer, earned an annual salary of $80,000 at Ace Corp. In 2014, but elected to take only $50,000. Ace, which was financially able to pay Burg's full salary, credited the unpaid balance of $30,000 to Burg's account on the corporate books in 2014, and actually paid this $30,000 to Burg on January 30, 2015. How much of the salary is taxable to Burg in 2014?

a. $50,000
b. $60,000
c. $65,000
d. $80,000





Answer: D