COMPREHENSIVE TAX RETURN PROBLEM

question 98

Essay

COMPREHENSIVE TAX RETURN PROBLEM.Your cousin,Antonia,who is 30 years old,single and a restaurant manager,heard that you have enrolled in the Masters of Taxation program at State University.She has asked you for help in preparing her 2017 tax return and provides you with the following information:
Note:
[1] Antonia kept the award from the United Way.
[2] Benefits paid by the employer.
[3] Antonia borrowed $12,000 and used the proceeds to purchase a new car.
[4] The original cost of the clothes was $480 and the current FMV is $200
[5] Of the $888 in expenses,$180 are for meals and entertainment.
Compute Antonia's: adjusted gross income,taxable income,and tax liability.

---

Definitions:

Balance Sheet

A financial statement that shows a firm’s assets, liabilities, and owner’s equity.

Income Statement

A financial statement that shows the revenue and expenses of a firm, allowing you to calculate the profit or loss produced in a specific period of time.

GAAP

Generally Accepted Accounting Principles; a common set of accounting principles, standards, and procedures that companies must follow when they compile their financial statements.

Accounting Standards

Formal guidelines and principles designed to improve the transparency and consistency of financial reporting and accounting practices.