Deck 18: Taxes

Question 1

Use Exhibit 18-1 to determine the sales tax and calculate the total purchase price for the following items.

Answer 1

Given, the selling price of a Blue ray disk is
.
According to the Exhibit 18-1, the tax for the amount of sales ranging
is
.
Now the selling price is in between the above mentioned range. Hence the required amount of sales tax is
.
The total purchase price of the Blue ray disk will be the sum of the selling price and the sales tax.
That is
Therefore, the total purchase price is $19.05

Question 2

Calculate the missing information for the following purchases.
For its fleet of trucks, Overland Transport, Inc., purchased 580 tires rated at 50 pounds each. The tires had a retail price of $85 each. The sales tax is 4.5%, and the federal excise tax is $0.15 per pound.
a. What are the amount of sales tax per tire and the total sales tax
b. What are the amount of federal excise tax per tire and the total excise tax
c. What is the total purchase price of the tires

Answer 2

Given,
OT Inc. purchased
tires rated at
pounds each. The tires had a retail price of
each. The sales tax is
, and the federal tax is
per pound.
a)
Each tire has a retail price
.
The sales tax rate is
.
Hence the sales tax per tire can be calculated by
The amount of sales tax per tire is
.
Hence, the total sales tax is
.
b)
The federal excise tax is
per pound.
Each tire is purchased at the rate of
.
Hence, the amount of federal excise tax per tire is
.
Therefore, the total excise tax is
.
c)
Total purchase price of each tire is the sum of retail price, sales tax and the federal excise tax of each tire.
So the total purchase price of each tire is
.
The total purchase price of the tires is
.

Question 3

Calculate the missing information for the following taxpayers.

Answer 3

Given,
Filing status: Jointly
Total Income can be calculated by the formula:
Therefore,
The total income for S will be $66,003
According to the 2009 standard deductions, since S is married, filing jointly, his standard deduction will be $11,400.
Since the standard deduction is more than Itemized deductions, we prefer the former over the later. Hence total deduction cost is
As taxable income is obtained after subtracting total deduction cost from gross income.
Taxable income is:
The taxable income for S is $43,653

Question 4

Use Exhibit 18-1 to determine the sales tax and calculate the total purchase price for the following items.

Question 5

Calculate the assessed value and the property tax due on the following properties.

Question 6

Calculate the property tax rate required to meet the budgetary demands of the following communities. Note: When calculating budgetary demands, always round up.

Question 7

Use the Tax Table, Exhibit 18-3, to calculate the tax liability for the following taxpayers earning under $100,000.

Question 8

You are a manager for Vector International. You earn $50,000 per year and are in the 28% federal income tax bracket. Each year you contribute $2,500 tax free to your individual retirement account, IRA. The account earns 8% annual interest. In addition, the amount of tax that you save each year by making these "pre-tax" contributions is invested in a taxable aggressive growth mutual fund averaging 15%.
a. How much tax do you save each year by making the retirement fund contributions
b. How much will the retirement fund be worth in 30 years
c. Although the income from this investment is taxable each year, how much will the "tax savings" fund be worth in 30 years

Question 9

A tax based on the retail selling or rental price of tangible personal property is known as _____tax. (18-1)

Question 10

A pay-as-you-go tax based on the amount of income of an individual or a corporation is known as _____ tax. The amount of income to which tax rates are applied in order to calculate the amount of tax owed is known as ____income. (18-7)

Question 11

Calculate the missing information for the following taxpayers.

Question 12

Use Exhibit 18-1 to determine the sales tax and calculate the total purchase price for the following items.

Question 13

Calculate the assessed value and the property tax due on the following properties.

Question 14

Chuck Wells purchased a condominium with a market value of $125,000 The assessment rate is 70%, and the tax rate is 19.44 mills.
a. What is the assessed value of the condo
b. What is the amount of property tax

Question 15

Use the Tax Table, Exhibit 18-3, to calculate the tax liability for the following taxpayers earning under $100,000.

Question 16

Use Exhibit 18-1 to determine the sales tax and calculate the total purchase price for the following items.

Question 17

Calculate the assessed value and the property tax due on the following properties.

Question 18

As an accountant for the Give Me A Break Tax Service, use the Tax Table, Exhibit 18-3, or the Tax Computation Worksheet, Exhibit 18-4, whichever is appropriate, to calculate the tax liability for the following clients.

Question 19

Use Exhibit 18-1 to determine the sales tax and calculate the total purchase price for the following items.

Question 20

Calculate the assessed value and the property tax due on the following properties.

Question 21

As the tax assessor for Indian Creek County, you have been informed that due to budgetary demands, a tax increase will be necessary next year. The total market value of the property in the county is $600,000,000. Currently, the assessment rate is 45% and the tax rate is 30 mitts. The county commission increases the assessment rate to 55% and the tax rate to 35 mills.
a. How much property tax was collected under the old rates
b. How much more tax revenue will be collected under the new rates

Question 22

Use the Tax Computation Worksheet, Exhibit 18-4, to calculate the tax liability for the following taxpayers earning $100,000 or above.

Question 23

Sales tax expressed in its most common form, as a percent of the retail price of an item, is known as the sales tax_____. (18-2)

Question 24

When calculating an individual's taxable income, we subtract the sum of the _____ deductions or the _____ deduction, which ever is larger, from adjusted gross income. (18-7)

Question 25

As an accountant for the Give Me A Break Tax Service, use the Tax Table, Exhibit 18-3, or the Tax Computation Worksheet, Exhibit 18-4, whichever is appropriate, to calculate the tax liability for the following clients.

Question 26

Calculate the missing information for the following purchases.

Question 27

Calculate the assessed value and the property tax due on the following properties.

Question 28

You own an a townhome with an assessed value of $185,400. The tax rate is $2.20 per $100 of assessed value.
a. What is the amount of property tax
b. If the state offers a 4% discount for early payment, how much would the tax bill amount to if you paid early
c. If the stare charges a mandatory
penalty for late payments, how much would the tax bill amount to if you paid late

Question 29

Use the Tax Computation Worksheet, Exhibit 18-4, to calculate the tax liability for the following taxpayers earning $100,000 or above.

Question 30

Calculate the missing information for the following purchases.

Question 31

Calculate the assessed value and the property tax due on the following properties.

Question 32

As an accountant for the Give Me A Break Tax Service, use the Tax Table, Exhibit 18-3, or the Tax Computation Worksheet, Exhibit 18-4, whichever is appropriate, to calculate the tax liability for the following clients.

Question 33

Calculate the missing information for the following purchases.

Question 34

Calculate the assessed value and the property tax due on the following properties.

Question 35

As a tax return preparer for The Fernando Rodriguez Tax Accounting Service, you have been asked to calculate the missing information for eight of the firm's tax clients. Use the standard deductions listed on page 613.

Question 36

Use the Tax Computation Worksheet, Exhibit 18-4, to calculate the tax liability for the following taxpayers earning $100,000 or above.

Question 37

Write the formula for calculating the selling price of an item when the total purchase price, including sales tax, is known. (18-3)

Question 38

According to the tables and information given in this chapter, if your filing status was Single and your adjusted gross income was $65,775, $3,950 was multiplied by the total number of _____ claimed, and that product was subtracted from adjusted gross income to arrive at taxable income. (18-7)

Question 39

As an accountant for the Give Me A Break Tax Service, use the Tax Table, Exhibit 18-3, or the Tax Computation Worksheet, Exhibit 18-4, whichever is appropriate, to calculate the tax liability for the following clients.

Question 40

Calculate the missing information for the following purchases.

Question 41

Calculate the assessed value and the property tax due on the following properties.

Question 42

As a tax return preparer for The Fernando Rodriguez Tax Accounting Service, you have been asked to calculate the missing information for eight of the firm's tax clients. Use the standard deductions listed on page 613.

Question 43

Use the Tax Computation Worksheet, Exhibit 18-4, to calculate the tax liability for the following taxpayers earning $100,000 or above.

Question 44

Calculate the missing information for the following purchases.

Question 45

Calculate the assessed value and the property tax due on the following properties.

Question 46

As an accountant for the Give Me A Break Tax Service, use the Tax Table, Exhibit 18-3, or the Tax Computation Worksheet, Exhibit 18-4, whichever is appropriate, to calculate the tax liability for the following clients.

Question 47

Calculate the missing information for the following purchases.

Question 48

Calculate the assessed value and the property tax due on the following properties.

Question 49

As a tax return preparer for The Fernando Rodriguez Tax Accounting Service, you have been asked to calculate the missing information for eight of the firm's tax clients. Use the standard deductions listed on page 613.

Question 50

Use the Tax Computation Worksheet, Exhibit 18-4, to calculate the tax liability for the following taxpayers earning $100,000 or above.

Question 51

A tax levied on certain luxury or nonessential products and services such as alcoholic beverages, furs, tobacco products, and airline tickets is known as a(n) _____ tax. (18-4)

Question 52

If an individual's taxable income is less than $100,000, we use the Tax _____ to find the tax liability. When the taxable income is $100,000 or more, we use the Tax _____ Worksheet to calculate tax liability. (18-8, 18-9)

Question 53

As an accountant for the Give Me A Break Tax Service, use the Tax Table, Exhibit 18-3, or the Tax Computation Worksheet, Exhibit 18-4, whichever is appropriate, to calculate the tax liability for the following clients.

Question 54

Calculate the missing information for the following purchases.

Question 55

Calculate the assessed value and the property tax due on the following properties.

Question 56

As a tax return preparer for The Fernando Rodriguez Tax Accounting Service, you have been asked to calculate the missing information for eight of the firm's tax clients. Use the standard deductions listed on page 613.

Question 57

As a newly hired IRS trainee, you have been asked to calculate the amount of tax refund or tax owed for the following taxpayers.

Question 58

Calculate the missing information for the following purchases.

Question 59

Calculate the assessed value and the property tax due on the following properties.

Question 60

Calculate the amount of tax refund or tax owed for the following taxpayers.

Question 61

Calculate the missing information for the following purchases.

Question 62

Calculate the assessed value and the property tax due on the following properties.

Question 63

As a tax return preparer for The Fernando Rodriguez Tax Accounting Service, you have been asked to calculate the missing information for eight of the firm's tax clients. Use the standard deductions listed on page 613.

Question 64

As a newly hired IRS trainee, you have been asked to calculate the amount of tax refund or tax owed for the following taxpayers.

Question 65

Another name for property tax is _____ _____ tax. (18-5)

Question 66

A tax _____ is a dollar-for-dollar subtraction from an individual's or a corporation's tax liability. (18-10)

Question 67

Calculate the amount of tax refund or tax owed for the following taxpayers.

Question 68

Calculate the missing information for the following purchases.

Question 69

Calculate the assessed value and the property tax due on the following properties.

Question 70

As a tax return preparer for The Fernando Rodriguez Tax Accounting Service, you have been asked to calculate the missing information for eight of the firm's tax clients. Use the standard deductions listed on page 613.

Question 71

As a newly hired IRS trainee, you have been asked to calculate the amount of tax refund or tax owed for the following taxpayers.

Question 72

Calculate the missing information for the following purchases.

Question 73

Calculate the property tax rate required to meet the budgetary demands of the following communities.

Question 74

Calculate the amount of tax refund or tax owed for the following taxpayers.
Bob Paris is the promotions director for Power 105, a local radio station. He is single and claims two exemptions. Last year Bob earned a salary of $2,450 per month from the station and received a $3,500 Christmas bonus. In addition, he earned royalties of $3,250 from a song he wrote, which was recorded and made popular by a famous musical group. Bob's itemized deductions amounted to $1,850, and he is entitled to a tax credit of $1,765. If the radio station withheld $325 per month for income tax, what is Bob's:
a. Adjusted gross income
b. Taxable income
c. Tax liability
d. Is Bob entitled lo a refund, or does he owe additional taxes How much

Question 75

Gloria Carey purchased a refrigerator at Best Buy for $899.90. The delivery charge was $20, and the ice maker hookup amounted to $55. The state sales tax is
, and the city tax is 1.3%.
a. What is the total amount of sales tax on the refrigerator
b. What is the total purchase price

Question 76

Calculate the assessed value and the property tax due on the following properties.

Question 77

As a tax return preparer for The Fernando Rodriguez Tax Accounting Service, you have been asked to calculate the missing information for eight of the firm's tax clients. Use the standard deductions listed on page 613.

Question 78

As a newly hired IRS trainee, you have been asked to calculate the amount of tax refund or tax owed for the following taxpayers.

Question 79

The value of property' for tax purposes is known as the _____ value. The value of property based on location, size, cost, and other such factors is known as the fair _____ value. (18-5)

Question 80

According to the Corporate Tax Rate Schedule, corporate tax rates range from a low of _____ to a high of_____. (18-11)