ACC 455 Week 3 Signature Assignment Phoenix Medical Assignment

ACC 455 Week 3 Signature Assignment Phoenix Medical Assignment

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Attachments: ACC 455 Week 3 Team Assignment Phoenix Medical Worksheet, Part 1.xlsx [ Preview Here ]

Resources:  Medical Data Worksheet Student Part 1,  Medical Worksheet Student Part 1

Include the following:

  • Complete the Book Adjustments (Adj1 Sale of fixed assets, Adj2 2015 Depreciation, and Reclass of accounts payable) using the included resources.
  • Adjust the Journal Entries using the included resources for 2015 depreciation.
  • Apply information from the included resources to complete the Tax Adjustments:
    1. Accrual to Cash Adjustment - Accounts Receivable;
    2. Charitable contributions carryover;
    3. 50% Meals and Entertainment;
    4. Non-deductible penalties;
    5. Tax Exempt interest;
    6. Accrual to Cash Adjustment - Accounts Payable.
  • Classify the Taxable Income entries on the Adjusted Trial Balance to complete using the included resources.
  • Apply Generally Accepted Accounting Principles. Your manager has also listed questions that require a response. Read the Phoenix Medical Worksheet Student Part 1 (Microsoft® Word) and answer the questions using short answers. 
  • Complete the Microsoft® Excel® spreadsheet showing your adjustments and final tax trial balance. Answer all questions as short answers.

Click the Assignment Files tab to submit your assignment as a Microsoft® Word document or Microsoft® Excel® spreadsheet.

 

 

 

Medical Worksheet

Week 3 Determine Adjusted Book Income:

 

You are provided with the unadjusted trial balance (Microsoft® Excel) and your manager’s meeting notes and questions (Microsoft® Word) for your new tax client – Phoenix Medical. 

Following the notes, modify the unadjusted trial balance to generate a trial balance workpaper (in Microsoft® Excel) that includes:

Adjusting Journal Entries

Adjusted Book Income

Tax Journal Entries

Taxable Income

Answers to your manager’s questions (Microsoft® Word or Excel).

The client depends on you, the CPA, to provide journal entries for activity in fixed assets. While discussing fixed assets, the client divulges that he got a great deal to upgrade his laser dermatology equipment.  Ultimately, you find out that $569,888 of new equipment was purchased and placed in service on 6/18/2014.

Furthermore, and much after the fact, you discover that old medical equipment was sold to an unrelated party for $75,000 cash. The original cost of the equipment was $300,000 and it was fully depreciated (no Sec. 179). The cash was deposited in one of the shareholders personal accounts.

Provide a journal entry to calculate the gain on sale and adjust the fixed asset and accumulated depreciation accounts.

What is the nature of this gain?

Could the Dr. have structured this sale in a different way to avoid taxable income? How?

The client depends on his accountant to provide a journal entry for the annual depreciation expense. They have adopted a policy of treating book depreciation equal to tax depreciation.  Depreciation expense for the year will include:

Depreciation on assets placed in service prior to 2014 is: $86,769

Maximize Sec. 179 expense on assets placed in service in 2014.

Take Sec. 168(k) – 50% Bonus – on new equipment if applicable.

Week 3 Determine Taxable Income:

 

Determine taxable income. Show all adjustments in the Microsoft® Excel spreadsheet.  Footnote references are provided to assist you.

The Dr. has filed his prior tax returns on the cash basis.

What questions will you ask to be sure he can continue to file on the cash basis?

You find that in 2014, the Dr. qualifies, and choose to file on the cash basis. His books are kept on the accrual basis. Determine the adjustments needed.

No federal taxes were paid in 2013, and no estimated taxes were paid in 2014.

Within the state tax expense, you find $4,389 is late payment penalties.

While analyzing the financial information, you find that hidden in “Accounts Payable” is $28,953 of accrued salaries. You also find that the salaries were paid in the first week of February.

Does this have an impact on taxable income?

Determine the accrual to cash adjustments for accounts receivable and accounts payable.

A charitable contribution carryforward of $40,000 is available.

Included in insurance expense is $12,523 of  officers’ life insurance. You determine the company is the beneficiary, and  each officer is a greater than 20% shareholder.

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