EBK ACCOUNTING PRINCIPLES
13th Edition
ISBN: 9781119411017
Author: Weygandt
Publisher: WILEY
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During 2020, Jackie sent her brother Junnie $2,500 via a telegraphic transfer through El Banco Prieto. The bank’s remittance clerk made a mistake and credited Junnie with $250,000 which he promptly withdrew. The bank demanded the return of the mistakenly credited excess, but Junnie refused to do so. The BIR entered the picture and investigated Junnie. Would the BIR be correct if it determines that he earned a taxable income under the facts?
No, it was not her fault that the funds in excess of $2,500 were credited to him.
Yes, income is a taxable income regardless of the source
No, he had no income because he had no right to the mistakenly credited funds.
No, the funds in excess of $2,500 were in effect donated to her.
Jim Pharoah, M.D., keeps his accounting records on the cash basis. During 2021, Dr. Pharoah collected $380000 from his patients. At December 31, 2020, Dr. Pharoah had accounts receivable of $39500. At December 31, 2021, Dr. Pharoah had accounts receivable of $69000 and unearned revenue of $9000. On the accrual basis, how much was Dr. Pharoah's patient service revenue for 2021?
$400500.
$409500.
$340500.
$418500.
Last year Nate opened a savings account with a deposit of $17,250. The account was in the name of Nate and Derrick, joint tenancy
with the right of survivorship. Derrick did not contribute to the account, but this year he withdrew $5,750.
Required:
a-1. Has Nate made a complete gift?
a-2. What is the amount of the complete gift, if any, and when was the gift made?
Complete this question by entering your answers in the tabs below.
Req A1
Req A2
What is the amount of the complete gift, if any, and when was the gift made?
Amount of complete gift
At the time of withdrawal
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