On January 5, 2018, Tim Purchased a Bond Paying Interest

question 72

Multiple Choice

On January 5, 2018, Tim purchased a bond paying interest at 6% for $30,000. On March 31, 2018, he gave the bond to Jane. The bond pays $1,800 interest on December 31. Tim and Jane are cash basis taxpayers. When Jane collects the interest in December 2018:

• A) Tim must include all of the interest in his gross income.
• B) Jane must report $1,800 gross income for 2018.
• C) Jane reports $1,350 of interest income in 2018, and Tim reports $450 of interest income in 2018.
• D) Jane reports $450 of interest income in 2018, and Tim reports $1,350 of interest income in 2018.
• E) None of these is correct.

Calculate the closing balance in the provision for annual leave account incorporating wage rises and leave taken.

Determine gross entitlements for employees leaving the company with untaken leave entitlements.

Recognize liabilities for short-term compensated absences based on vesting and accumulating conditions.

Familiarize with various employee benefits not covered by AASB 119/IAS 19.

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Definitions:

Portable TV

A small television set designed to be easily transportable, allowing for television viewing in various locations.

Binding Contract

A legally enforceable agreement between two or more parties that is bound by law and has legal obligations.

Verbal Offer

An offer made through spoken communication rather than in written form, which can be legally binding under certain conditions.

Affirmatively

In a manner that expresses agreement or conformation; also, acting in a positive or confirming way.