Question Details

(Solved by Expert Tutors) Advertising Agency is a calendar year, accrual basis C corporation>


headquartered in St. Paul that provides advertising services to tour and travel companies. Assume that AAA's 2016 financial (book) income before tax is $2,000,000. AAA has been in existence for five years and has deferred tax assets arising from prior year accounts receivable and deferred tax liabilities arising from depreciation on its 2015 financial balance sheet.
The following items have been included in it's 2016 pre-tax financial (book) income:
$80,000 from a two year advertising contract. Under the terms of the two year contract,
They started providing advertising services on September 1, 2016 to a major Minnesota tour and travel company and received its entire
advertising fee of $480,000 on that date.
$10,000 of tax-exempt municipal bond interest from City of Minneapolis highway improvement bonds.
Life insurance premiums paid on key officers amounted to $5,000.
$15,000 increase to its allowance for doubtful accounts; actual bad debts written off amounted to $25,000.
$20,000 contributions to political campaigns.
$150,000 straight-line financial depreciation; total federal tax depreciation amounted to $100,000.
$20,000 of substantiated meals and entertainment expenses.
$2,000 Federal Trade Commission fine paid for deceptive advertising practices
a).?What amount of advertising income would they report on its financial (book) income statements in 2017 and 2018 from the two year advertising contract? Please show your work and explain your calculations
b). What amount of advertising income would they report on its 2016 federal income tax return from the two year advertising contract? What amount of advertising income would they report on its federal income tax returns in 2017 and 2018 from the two year advertising contract? Please show your work and explain your calculations
c).?Identify which items of the agency in 2016 (on the previous page) are permanent book/tax differences and which items are temporary book/tax differences
d). What is their 2016 federal taxable income and federal income tax liability? Please show your work and explain your calculations.
e).?What is their 2016 federal income tax expense for financial income statement purposes? Please show your work and explain your calculations

 


Solution details:

Pay using PayPal (No PayPal account Required) or your credit card . All your purchases are securely protected by .
SiteLock

About this Question

STATUS

Answered

QUALITY

Approved

DATE ANSWERED

Apr 19, 2020

EXPERT

Tutor

ANSWER RATING

YES, THIS IS LEGAL

We have top-notch tutors who can do your essay/homework for you at a reasonable cost and then you can simply use that essay as a template to build your own arguments.

You can also use these solutions:

  • As a reference for in-depth understanding of the subject.
  • As a source of ideas / reasoning for your own research (if properly referenced)
  • For editing and paraphrasing (check your institution's definition of plagiarism and recommended paraphrase).
This we believe is a better way of understanding a problem and makes use of the efficiency of time of the student.

NEW ASSIGNMENT HELP?

Order New Solution. Quick Turnaround

Click on the button below in order to Order for a New, Original and High-Quality Essay Solutions. New orders are original solutions and precise to your writing instruction requirements. Place a New Order using the button below.

WE GUARANTEE, THAT YOUR PAPER WILL BE WRITTEN FROM SCRATCH AND WITHIN A DEADLINE.

Order Now