Universidad de Puerto Rico
Recinto de Rio Piedras
Facultad de Administración de Empresas
Departamento de Contabilidad
Excersises: Chapters 8-10
CONT 4007
Chapter 8 Exercises
8.26- Tom and Shannon’s medial expense deduction for this year would be:
$1,200 Hospital cost
+ 1,600 Doctor’s bills
+ 200 Medicine and Drugs
+ 400 Hospitalization insurance premiums
+ 600 Doctor’s Bills
+ 100Medicines and Drugs
+ 38 (mileage traveled)
$4,138 Medical expenses
– 2,625 (7.5%of AGI)
$ 1,513 Allowed for deduction
8.27- If Tom and Shannon were reimbursed $2,100 they would not be able to deduct any amount because the expenses wouldn’t exceed the 7.5% of AGI needed.
8.28- Carlos tax expense deduction for the current tax year would be $6,000 of state income, the amount actually paid. And sincehe’s claiming income taxes paid, sales tax can’t be claimed if claiming them, either one or the other.
8.31- Sally’s qualified student loan interest deduction in 2008 would be:
$3,000 paid
-2,500 as deduction
$500
8.32- The deduction phases out at that amount of AGI, therefore she wouldn’t be able to deduct anything.
8.33- Josephine’s total interest deduction would be $5,800
8.34- Mike and Sally’sinterest deduction for the 2008 tax year would be:
$3,500 education loans
-2,500 allowed
$1,000 education loans allowed
+ 4,000 mortgage loan
$5,000
8.35- Of Greg’s interest the following would be deductible:
100/150 *21,600 = $14,400
8.36- Of the investment interest expense for tax purposes in 2008, $7,000 would be deductible limited to the amount of net investment income.
8.38-???????????
8.42- Jackson’s casualty and theft loss for the yar assuming a $40,000 adjusted gross income would be:
$50,000 adjusted basis
-30,000 insurance
-100 deduction
-4,000
$ 15,900
+ 200 FMV watch
+ 25 Ice chest
+ 50 cash
$16,175
8.48- The following unreimbursed employee expenses are deductible for adjusted gross income:
a. Transportation Expenses
b. Union Dues
c. Travel Expenses
8.49- Ifan employee does not make an adequate accounting to the employer and employer reimbursement of employee expenses exceeds the expenses, the employee business expenses are: B Shown as miscellaneous itemized deductions subject to the 2 percent nondeductible floor.
8.50- If an employee makes adequate accounting to the employer and employer reimbursement of employee expenses is less than the expenses,the excess expenses are: B Deductible as miscellaneous itemized deductions subject to the 2 percent nondeductible floor.
3.36- ??????
Chapter 10 Exercises
10.49- Peter’s recognized gain on the sale would be:
50,000 cash payment
+ 30,000 extra equipment transferred
10,000 loan assumed
-5,000 selling expenses
$85,000
-40,000 original price
$45,000 gain B
10.25- The following result in arecognized gain or loss:
a. Sale of stock, which has an adjusted basis of $5,000, for $7,000.
b. Sale of a personal auto with an adjusted basis of $10,000 for $12,000
10.21- The basis in the building at the time of sale would be:
$570,000 original basis
+ 60,000
+ 40,000
+ 150,000
+ 50,000
-420,000 depreciation
$ 450,000 adjusted basis
Realized gain would be: $800,000 amount realized-450,000 adjusted basis
$ 350, 000 gain
10.26- Gail’s basis would be:
FMV
Land $125,000 = $112,500
Truck $25,000 = $22,500
Truck #2 $50,000 = $45,000
Bldg. $500,000 = $450,000
$700,000 = $630,000
10.24- Lance’s basis in the stock would be FMV = $750, and it is included.
10.35- a. 17,000- 10,000 = $7,000 gain
b. 5,500- 10,000 = $4,500 loss
c. 5,500- 7,500 = $2,000 loss
d.8,000- 7,500 = $500 gain
10.28- (30,000/600) = $50 basis, this would be short term given it is less than a year.
10.30- Holding period of new shares beings on date of receipt of stock dividend. The basis for the new stock would be $12, while that of the old stock would remain the same. The total income would be $1200 (100* $12).
10.44- a. Loss of $4,000 disallowed
b. $6,000- $4,000 = $2,000 gain…