The Tax Preparation Blog

Archive for the ‘Tax Adjustments’ Category

Question: Accounting Question?

On Jan.21.2007 these Liability accounts are presented in the ledger:
Accounts payable 42500
Sales Tax payable 6600
Unearned service revenue 19000
During January the following occured:

Jan1. Borrowed 12k in cash from Midland bank on 4 month, 8%, 12000 note
jan5. Sold merchandise for cash totalin 6,510, which inculdes 5 % sales taxes.
Jan12. provided services for customers who had made advance payments of 10,000 (credit service revenue)
jan14. paid state treasurers department for sales tax collected december of 2006, 6600
jan.20 sold 500 units of new product on credit at 48 per unit, plus 5% sales tax.

Note* during jan, company employees earned wages of 60000. withholdings inculded were 4590 for Social Sec., 5000 for federal income tax and 1500 for state income tax.

1. journalize january entries
2. ” ” adjusting entries at jan.31 for outstanding note payable and for wage expense and payroll tax expense
3. prepare current liablilites section of balance sheet.

Answer: 1. journalize january entries

Jan1. Borrowed 12k in cash from Midland bank on 4 month, 8%, 12000 note
Dr Cash 12,000
Cr Note payable 12,000

jan5. Sold merchandise for cash totalin 6,510, which inculdes 5 % sales taxes
Dr Cash 6,510
Cr Sales 6,200
Cr Sales tax payable 310

Jan12. provided services for customers who had made advance payments of 10,000 (credit service revenue)
Dr Unearned service revenue 10,000
Cr Service revenue 10,000

jan14. paid state treasurers department for sales tax collected december of 2006, 6600
Dr Sales tax payable 6,600
Cr Cash 6,600

jan.20 sold 500 units of new product on credit at 48 per unit, plus 5% sales tax
Dr A/cs receivable 25,200
Cr Sales 24,000
Cr Sales tax payable 1,200

2. ” ” adjusting entries at jan.31 for outstanding note payable and for wage expense and payroll tax expense
Dr Interest expense 80
Cr Interest payable 80

Dr Wages expense 60,000
Cr FICA tax payable 4,590
Cr Federal income tax withholdings payable 5,000
Cr State income tax withholdings payable 1,500
Cr Wages payable 48,910

Dr FICA expense 4,590 (matched)
Cr FICA tax payable 4,590

3. prepare current liablilites section of balance sheet
Accounts payable 42,500
Sales Tax payable 1,510
Unearned service revenue 9,000
Wages payable 48,910
FICA tax payable 9,180
Federal income tax withholdings payable 5,000
State income tax withholdings payable 1,500
Note payable 12,000
Interest payable 80

Alliance Data Reports Second-Quarter Results

Alliance Data Systems Corporation , a leading provider of loyalty and marketing solutions derived from transaction-rich data, today announced results for the second quarter 2010.

Question: What screen in turbo tax do I enter my tax credit adjustment amount?

Turbo Tax and the Certificate for Income Adjustment
I am itemizing and I have a Certificate for Income Tax Adjustment from Department of Defense for my overpayment of a debt to the federal govt. What screen in turbo tax do I enter my adjustment amount? It is over $3000. I want to take the tax credit not the tax deduction.

Answer: Turbo Tax can’t do this. You should use Tax Cut instead – it is much better.

Estate tax uncertainties pending

THE VILLAGES — Estate planning may become one of the most important tax consequences next year for wealthy Villagers, as Congress decides whether to allow a scheduled repeal of the federal estate tax.

Tax Deductions for Home Based Business – Gabby Huguenin’s Wealth Coaching Call

Question: income taxes at end of accounting period?

the adjusting entry to record additional income taxes owed at the end of the accounting period includes:
1. debiting corporate income taxes payable and crediting income tax expenses
2. debiting factory overhead and crediting corporate income tax payable
3. debiting income tax expenses and crediting corporate income tax payable
4. debiting income tax expense and crediting factory overhead.

Answer: 3

For Members

Congress took its first tentative step toward fundamental tax reform when it enacted the Taxpayer’s Relief Act of 1997. Certainly, the Taxpayer’s Relief Act belongs to a class of legislation that warms only the hearts of lobbyists and specialists who must deal with the growing tax labyrinth.

Killingworth man guilty of filing false tax return

A Killingworth man pleaded guilty in federal court Monday to filing a false tax return, according to the U.S. Attorney’s Office.

E-file and E-sign

Question: A question regarding tax relief on the cost of an SIA licence.?

After doing a bit of googling, I’ve just discovered that you can claim tax relief on the cost of an SIA licence you have paid yourself. I was wondering how you go about doing this?

If you are paying the cost directly from your wages, spread over say 12 months, has the adjustment for tax relief been performed before your wages reach you or is it still something you have to apply to the tax office yourself?

Thanks in advance.

Answer: You need to apply in writing to your tax office. Just write a letter telling them how much your annual fee is and they will adjust your code number.

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Black And Silver Office Suites Under Desk Keyboard Drawer Height Adjustable $58.44 …

Municipal budgets — and tax rates — show strain of recession

Federal Reserve Chairman Ben Bernanke has said that the recession “is likely over,” but that’s not being reflected in 2010 municipal budgets around York County.

Basic Explanation of W-4 tax Form : Deductions & Adjustments Worksheet: W-4 Tax Form