Answered step by step
Verified Expert Solution
Question
1 Approved Answer
I Please complete the book to tax reconciliation for the 2022 tax year on the work paper provided. Please ensure you show any necessary
I Please complete the book to tax reconciliation for the 2022 tax year on the work paper provided. Please ensure you show any necessary workings on the work paper. It is not sufficient to merely provide an answer/number. (30 points) River Walk, Inc. ("River Walk") is an accrual based taxpayer which sells components for the electronics industry. They are a private company and use the accrual basis of accounting for book purposes. River Walk uses a calendar year end. During the year no employee received stock options nor did any employee receive more than $1 million. Any accrued salaries and wages were paid by January 3, 2023. The accrued salaries and wages for 2021 (paid by January 4, 2022) were $300,000 and for 2022 were $400,000. Employees are not permitted to accrue vacation but must take it by December 31 each year or it is paid out to them at the end of the year, i.e. before December 31. River Walk's experience with bad debts has resulted in accounting policy of providing a reserve for doubtful debts of 1% of sales for the year. This accounting policy commenced this year. This year the company wrote off accounts in the reserve of $45,000. There were fixed asset additions for the year of $2,000,000 and the company wants to take bonus depreciation for the 2022 year. The company takes the bonus depreciation each year. River Walk uses the full inclusion method for the sale of their inventory. Unearned revenue for the sales were $3,000,000 at December 31, 2021 and $2,000,000 at December 31, 2022. There is no IRC 263A adjustment required. All travel expenses and employee benefits are accounted for under an accountable plan. The meals and entertainment expenses have been reviewed and are considered ordinary, necessary and reasonable and meet all the substantiation requirements. River Walk has a policy that all meals must be provided in a restaurant. Page 2 of 9 The company wrote off warranty expense in the warranty reserve for the year of $20,000.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started