Rattler, Inc, an exempt organization, trains disabled individuals to design web pages. Rather than hold a traditional graduation exercise, the graduates compete in a web design contest. Such activities are held four times each year. An admission fee of
$10 is charged to the general public to attend the contest. Eight hundred people attended the contest this year, and prizes of $2,000 were given to the top 3 graduates. Calculate the amount of Rattler's unrelated business income from this activity.
The contest activity is not classified as an unrelated trade or business. To be so classified, the following characteristics must be present.
? The organization conducts a trade or business.
? The trade or business is not substantially related to the exempt purpose of the organization.
? The trade or business is regularly carried on by the organization.
Based on the data provided, neither the "not substantially related" nor the "regularly carried on" characteristic is satisfied. Thus, Rattler incurs zero unrelated business income from the contest, because the contest is not an unrelated trade or business.
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On December 31, of the current year, Spectrum Company's unadjusted trial balance revealed the following: Accounts receivable of $185,600; Sales Revenue of $1,280,000; (75% were on credit), and Allowance for Doubtful Accounts of $1,600 (credit balance).Prepare the adjusting journal entry to record Spectrum's estimate for bad debts assuming:1. 6.0% of the accounts receivable balance is assumed to be uncollectible.2. Bad debts expense is estimated to be 1.5% of credit sales.3. Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear on the balance sheet after adjustment assuming the percentage of sales method is used.4. Prepare the entry to write off a $1,500 account receivable on January 1 of the next year.5. Show how Accounts Receivable and the Allowance for
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Finola, a certified public accountant, provides accounting services to Global Trade Corporation. The services include preparing Global Trade's financial reports and issuing opinion letters based on the reports. In 2014, Global Trade falls into serious
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During the economic downturn that occurred between the fall of 2007 and spring of 2009, stocks declined in price. This period is known as a(n)
A) hare market. B) tortoise market. C) bull market. D) bear market.
Asset replacement decisions involve:
A. Choices between closing down or continuing to operate a segment of a business. B. Choices between continuing to operate existing equipment or replacing it with new equipment. C. Choices between continuing to use existing materials or replacing them with less expensive materials. D. None of these answers are correct.