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ACCT 422 SEU Income Is Recognized when It Is Earned Question
User Generated
UNFFNANYUNZZNZ
Business Finance
Acct 422
Saudi electronic university
ACCT
Description
Unformatted Attachment Preview
College of Administration and Finance Sciences
Assignment (3)
Deadline: Saturday 27/11/2021 @ 23:59
Course Name: Tax and Zakat Accounting
Student’s Name:
Course Code: ACCT 422
Student’s ID Number:
Semester: 1st
CRN:
Academic Year: 1443 H
For Instructor’s Use only
Instructor’s Name: Dr. Ashfaque Ahmed
Students’ Grade:
/5
Level of Marks: High/Middle/Low
Instructions – PLEASE READ THEM CAREFULLY
• The Assignment must be submitted on Blackboard (WORD format only) via allocated
folder.
• Assignments submitted through email will not be accepted.
• Students are advised to make their work clear and well presented, marks may be
reduced for poor presentation. This includes filling your information on the cover
page.
• Students must mention question number clearly in their answer.
• Late submission will NOT be accepted.
• Avoid plagiarism, the work should be in your own words, copying from students or
other resources without proper referencing will result in ZERO marks. No exceptions.
• All answers must be typed using Times New Roman (size 12, double-spaced) font.
No pictures containing text will be accepted and will be considered plagiarism.
• Submissions without this cover page will NOT be accepted.
College of Administration and Finance Sciences
Assignment 3
Q-1- To make income taxable, income must be realized and recognized. Explain in your own words
the difference between income realization and income recognition, and then provide a short
numerical example to indicate the difference (Do not copy the same numerical example from other
students). (1.5 mark)
Answer
Q.2- Mr. X and Mrs. Y are married and have two dependent children. P & Q They also fully support
Mrs. Y’s mother who lives with them and has no income. Their 2014 tax and other related
information is as follows: (2 marks)
Particulars
Total salaries
Bank account interest income
Municipal bond interest income
Value of employer provided medical insurance
Value of premiums for $ 100000 of group term life insurance provided by employer
Gift from X’S parents
Gain from the sale of qualified small business stock acquired in 2008
Total itemized deductions
Dividend income—from ABC stock,
Loan from X’S parents
Amount in $
320,000
7,000
3,000
11,000
1,000
30,000
30,000
32,000
4,000
10,000
Required: Compute Mr. X and Mrs. Taxable income. (Show all calculations in proper /good form.)
Q.3- Ahmed’s medical expenses include the following: (1.5 mark)
Particulars
Food for personal use (expenses)
Travel allowances
Visitors fees
Prescription drugs
Eyeglasses
General purpose vitamins
Medical premiums
Doctors’ fees
Hospital fees
Amount in $
2,000
5,000
1,000
1,200
700
200
21,700
4,000
6,700
Ahmed’s AGI for the year is $66,000. He is single and age 59. Insurance company reimburses none
of the medical costs and other related items. After considering the AGI floor,
Required - What will be Ahmed’s medical expense deduction?
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