Refer to the IRS's ATG on Auto Dealership. Suppose a dealer sells a car to a customer

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Refer to the IRS's ATG on Auto Dealership.

Suppose a dealer sells a car to a customer for the following:

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The dealer sells the note to a finance company who agrees to pay the dealer a 20 percent commission on the finance charge, or $\$ 180$.

a. What is the correct entry to make?

b. Referring to J.R. Hansen, SCt, 59-2 USTC $\llbracket 9533,360$ US 446, 79 SCt 1270 , when is the amount held back taxable to the dealership?

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Forensic And Investigative Accounting

ISBN: 9780808026877

5th Edition

Authors: D. Larry Crumbley, Lester E. Heitger, Stevenson Smith

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Question Posted: Jun 05, 2024 02:04 AM

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Refer to the IRS's ATG on Auto Dealership. Suppose a dealer sells a car to a customer

Question:

Sales Price (including Sales Tax and license fees) $10,000 Less: Down payment 1,000 Balance to be Financed $9,000 Finance Charge @ 10% 900 Face amount of Installment Note $9,900

Step by Step Answer:

Forensic And Investigative Accounting

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