Edit & Create 3. Identify the primary term described by each event below: gross

Question

Edit & Create 3. Identify the primary term described by each event below: gross income, depreciation, operating expense, taxable income, income tax, or net operating profit after taxes. a) A new machine had a first-year write-off of S10,500. b) A public corporation estimates that it will report a S-750,000 net profit on its annual income statement c) An asset with a book value of $8000 was retired and sold for $8450. d) An over-the-counter software system will generate $420,000 in revenue this quarter. e) An asset with a MACRS recovery period of 7 years has been owned for 10 years. It was just sold for $2750. g) A convenience store collected S33,550 in lottery ticket sales last month. Based h) An asset with a first cost of $65,000 was utilized on a new product line to 0 The cost to maintain equipment during the past year was $641,000 The cost of goods sold in the past year was $3,680,200. on winners holding these tickets, a rebate of S350 was sent to the manager increase sales by $150,000.

Explanation / Answer

Taxable Income

Gross income

Taxable Income

Asset cost $ 65,000 - Depreciation, & sales of $ 150,000 - Gross income

Question Answer a) A New Machine had a first year write-off of $ 10,500/- Depreciation b) A Public corporation estimates that it will report a - $ 750,000/- net profit on its annual Income Statement Taxable Income c) An asset with book value of $ 8,000/- was retired and sold for $ 8,450/-

Taxable Income

d) An over-the-counter software system can generate $ 420,000/- in revenue this quarter

Gross income

e) An asset with a MACRS recovery period of 7 years has been owned for 10 years it was just sold for $ 2,750/-

Taxable Income

f) The cost of goods sold in the past year was $ 3,680,200 Operating Expense g) A convenience store collected $ 33,550/- in lottery ticket sales last month based on winners holding these tickets, a rebate of $ 350 was sent to the manager Collection of $33,550 - Gross income, & rebate of $ 350 - Operating Expense h) An asset with a first cost of $ 65,000/- was utilized on a new production line to increase sales by $150,000

Asset cost $ 65,000 - Depreciation, & sales of $ 150,000 - Gross income

g) The cost to maintain equipment during the past year was $ 641,000 Operating Expense

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