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2 years ago

Members should use the AICPA Conceptual Framework for Independence to:

Business

1 answer:

ICE Princess25 [194]2 years ago

4 0

Answer:

The correct answer is letter "C": Understand the rules on confidential client information and acts discreditable to the profession.

Explanation:

The American Institute of Certified Public Accountants (AICPA) is a non-profit organization founded in 1887 to contribute to setting the standards and rules for Accounting as a profession. The setting AICPA Conceptual Framework establishes the diligence in practice Certified Public Accountants (CPAs) must follow at the moment of protecting customers' information.

If there are signs of threat, the CPA must determine if it exists before proceeding to assist the customer. If there is a threat, the CPA should evaluate the degree of the threat to find out if it is minimal or if no service can be rendered at all.

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Rank the following three single taxpayers in order of the magnitude of taxable income (from lowest to highest). (First mean high

Firlakuza [10]

Answer:

Ahmed's ranking is Third (Lowest Taxable Income)

Baker's ranking is Second

Chin's ranking is First (Highest Taxable Income)

Explanation:

In order to determine the rankings, lets compute each taxpayer's taxable income by making the necessary deductions as applicable. Taxable income calculated for each taxpayer below in serial order. Before we calculate, lets have an idea of how deductions are made.

AGI is defined as the adjusted gross income which is calculated as an individual's gross income minus the expenses that qualify as deductible. These expenses include the likes of contributions to the IRA, payment of interest on student loans, alimony payments, contributions to self-employment insurance, moving expenses, some business related expenses pertaining to educators, artists etc, and some rental expenses associated with a business activity. Therefore, intuitively, we can see that a taxpayer with the highest amount of deductions for AGI would benefit the most when calculating taxable income.

Itemized deductions are expenses that a taxpayer can incorporate to lower their taxable income by reducing their adjusted gross income (AGI). These include certain medical expenses, markup on house loans and charities. Taxpayer's can chose between either opting to deduct itemized expenses or standard deductions which is a fixed deduction allowed under tax law. Obviously, a taxpayer would go for the deduction amount which is the highest. Standard deduction is $ 5,950. Therefore, among the taxpayer's, the one with the highest amount of itemized deductions would benefit the most.

Lets calculate taxable income now.

(1) Ahmed

Gross Income: 80,000

Less Deduction for AGI: (8,000)

Adjusted Gross Income: 72,000

Less higher of itemized deduction or standard deduction: (5,950)

Taxable Income: 66,050

(2) Baker:

Gross Income: 80,000

Less Deduction for AGI: (4,000)

Adjusted Gross Income: 76,000

Less higher of itemized deduction or standard deduction: (5,950)

Taxable Income: 70,050

(3) Chin:

Gross Income: 80,000

Less Deduction for AGI: (0)

Adjust Gross Income: 80,000

Less higher of itemized deduction of standard deduction: (8,000)

Taxable Income: 72,000

As we can see from the above, since Ahmed has the highest deductions for AGI he has the lowed adjusted gross income. He can then take use of the fact that he can deduct a standard deduction of 5,950 (while not having any itemized deductions) to further lower his taxable income.

Chin did not have an deductions for AGI which made his taxable income the highest.

Note: Taxpayers can also deduct personal and dependency deductions but these have been excluded in the context of the question based on the assumption that these deductions have either not been made or would be equal for all three taxpayers. The answer would not be affected in either case.

5 0

2 years ago

Seventy-Two Inc., a developer of radiology equipment, has stock outstanding as follows: 60,000 shares of cumulative preferred 2%

SSSSS [86.1K]

Answer:

Year 1: Dividend paid to cumulative preferred stock = $51,000; Dividend paid to common stock = 0.

Year 2: Dividend paid to cumulative preferred stock = $93,000; Dividend paid to common stock = $12,000.

Year 3: Dividend paid to cumulative preferred stock = $72,000; Dividend paid common stock = $9,000.

Year 4: Dividend paid to cumulative preferred stock = $72,000; Dividend paid common stock = $48,000.

Explanation:

Year 1

Dividend distributed = $51,000

Cumulative preferred stock dividend payable = 60,000 * $60 * 2% = $72,000

Dividend paid to cumulative preferred stock = $51,000

Carried forward cumulative preferred stock dividend = $72,000 - $51,000 = $21,000

Dividend paid to common stock = 0

Year 2

Dividend distributed = $105,000

Year 2 cumulative preferred stock dividend due = 60,000 * $60 * 2% = $72,000

Cumulative preferred stock dividend payable = Due in year 2 + Carried down from year 1 = $72,000 + $21,000 = $93,000

Dividend paid to cumulative preferred stock = $93,000

Dividend paid to common stock = $105,000 - $93,000 = $12,000

Year 3

Dividend distributed = $81,000

Cumulative preferred stock dividend payable = 60,000 * $60 * 2% = $72,000

Dividend paid to cumulative preferred stock = $72,000

Dividend paid common stock = $81,000 - $72,000 = $9,000

Year 4

Dividend distributed = $120,000

Cumulative preferred stock dividend payable = 60,000 * $60 * 2% = $72,000

Dividend paid to cumulative preferred stock = $72,000

Dividend paid common stock = $120,000 - $72,000 = $48,000

5 0

2 years ago

4. As of November 1, 1999, the exchange rate between the Brazilian real and U.S. dollar is R$1.95/$. The consensus forecast for

vaieri [72.5K]

Answer:

Forecast exchange rate = $2.29(Approx)

Explanation:

Given:

Exchange rate = $1.95

Inflation rate difference = 2.6% - 20% = 17.4%

Computation:

Forecast exchange rate = 1.95 / (1-17.4%)

Forecast exchange rate = $2.29(Approx)

5 0

2 years ago

Compute whiz company's adjusted cash balance per books based on the following information:

Romashka [77]

Hey there!

Beginning: $4,200

Deposit in transit: not counted for ACB

Check printing charge: -$20

Note collected by bank of whiz: -$1,600

4,200 - 20 - 1,600 = 2,580

Adjusted cash balance = $2,580

Hope this helps!

6 0

2 years ago

One of the benefits of mindfulness is that it enables you to

Goshia [24]

Benefits of having a mindfulness life is that you will think before making decisions.

3 0

2 years ago