how to do income tax for busines
Appendix E-2018 Practice Set Assignments- Comprehensive Tax Return Problems PROBLEM 1-INDIVIDUALS (FORM 1040) Jason R. and Jenni L. Dane are married and live at 13071 Sterling Drive, Marquete, MI 4 9866. Jason is a self-employed insurance claims adjuster (business activity code 524290), and Jenni is the dictitian for the local school district. They choose to file a joint tax return each year. 1. Jason represents several national casualty insurance companies on a contract basis. He operates this business on the cash basis. He is paid a retainer and receives additional compensation if the claims he processes for the year exceed a specified number. As an independent contractor, he is responsible for whatever expenses he incurs. Jason works out of an office near his home. The office is located at 1202 Moose Road. Ilc shares Suite 326 with a financial consultant, and opcrating expenses are divided equally between them. The suite has a common waiting room with a receptionist furnished and paid by the landlord. Jason paid his one- half share of the 2018 expenses as detailed below. Office rent Utilities (includes telephone and fax) Replacement of waiting room furniture on April 22 Renters' insurance (covers personal liability, casualty, theft) Office expense (supplies, postage New Toshiba copier on February 7 Walting room coffee service (catered) Waiting room magazine subscriptions $11,600 4,300 3,600 1,400 740 300 280 90 For his own business use, Jason purchased a $2,100 laptop computer on June 17 and a $1,200 Nikon camera on February 5. Except for his vchicle (sce item 2 bclow), Jason uses the $ 179 write-off option whenever possible. Jason has no expenditures for, which he is required to file Form 1099. used Toyota Camry that he uses 92% of the time for business. No trade-in was involved, and he did not claim any 179 expensing Jason uses the actual operating 2. On January 2, 2018, Jason paid $31,000 (including sales tax) to purchase a gently 7 Activity-Based Costing and Analysis Chapter 17 2. Determine the total overh ead cost assigned to each product line using the departmental overhead rates from requirement 2. Determine the overhead cost per unit for each product line using the departmental rate. 3. Exercise 17-6 using the plantwide rate and departmental rate methods Laval produces lamp. This lamp is lamps and home lighting fixtures. Its most popular product is a brushed aluminum desk made from components shaped in the fabricating department and assembled in the as- Assigning overhead cos sembly department. Information related to the 35,000 desk lamps produced annually follows. $280,000 $140,000 Direct materials P1 P2 Direct labor Fabricating department/7.000 DLH x $20 per DLH) Assembly department (16,000 DLH x $29 per DLH) $464,000 Machine hours 15,040 MH 21,000 MH Fabricating department Assembly department. Expected overhead cost and related data for the two production departments follow Fabricating 75,000 DLH 125,000 DLH 62,500 MH $200,000 Direct labor hours Machine hours Overhead cost 80,000 MH $300,000 Required Determine the plantwide overhead rate for Laval using direct labor hours as a base. Determine the total manufacturing cost per unit for the aluminum desk lamp using the plantwide over- head rate. 1. 2. Check (2 526.90 per 3. Compute departmental overhead rates based on machine hours in the fabricating department and di- rect labor hours in the assembly department. Use departmental overhead rates from requirement 3 to determine the total manufacturing cost per unit for the aluminum desk lamps 4. 14) 527 60 pes
