Question

On January 1, 2019, Faye gave Todd, her son, a 36-month certificate of deposit she purchased...

On January 1, 2019, Faye gave Todd, her son, a 36-month certificate of deposit she purchased December 31, 2017, for $8,638. The certificate had a maturity value of $10,000 and the yield to maturity was 5%. On November 30, 2019, ABC, Inc., had declared a dividend of $1.00 payable to stockholders of record on December 5th. How much interest and dividends should Todd include in his gross income for 2019?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Todd Interest Income = $454 and No Dividend .

Explanation :;

The certificate of deposit is an orginal issue document instrument. Faye should have reported $432 ($8,638 × .05 ) of interest income in 2018 and the adjusted basis of the CD is $9,070 ($8,638 + $432).

Todd must reported interest income for 2019

$9,070 × .05 = $454

The dividend had been declared before Todd received the stock. The income belong to Toye since she was the owner of the stock when the dividend was declared and she assigned to Todd the right to receive it.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
On January 1, 2020, Faye gave Todd, her son, a 36- month certificate of deposit she...
On January 1, 2020, Faye gave Todd, her son, a 36- month certificate of deposit she had purchased on December 31, 2018, for$ 8, 638. The certificate had a maturity value of$ 10,000 and the yield to maturity was 5%. On November 30, 2020, ABC, Inc., had declared a dividend of$ 1.00 payable to stockholders of record on December 5th• How much interest and dividends should Todd include in his gross income for 2020?
On January 1, 2020, Adele gave Josh, her son, a 36-month certificate of deposit she had...
On January 1, 2020, Adele gave Josh, her son, a 36-month certificate of deposit she had purchased on December 31, 2018, for $8,638. The certificate had a maturity value of $10,000 and the yield to maturity was 5% with interest compounded annually. On December 2, 2020, Adele also gave 500 shares of stock in Disney to Josh. On November 30, 2020, Disney had declared a dividend of $1.00 per share payable to stockholders of record on December 5th. Required: Determine...
1) On January 1, Crane Corporation had 64000 shares of $10 par value common stock outstanding....
1) On January 1, Crane Corporation had 64000 shares of $10 par value common stock outstanding. On March 17, the company declared a 10% stock dividend to stockholders of record on March 20. Market value of the stock was $12 on March 17. The entry to record the transaction of March 17 would include a Credit to common stock dividends distributasble for 64000 Debit to common stock dividends distributable for 64000 Credit to cash for 76800 Credit to stock dividends...
On January 1, 2017, Culver Corporation had these stockholders’ equity accounts. Common Stock ($10 par value,...
On January 1, 2017, Culver Corporation had these stockholders’ equity accounts. Common Stock ($10 par value, 81,500 shares issued and outstanding) $815,000 Paid-in Capital in Excess of Par Value 483,000 Retained Earnings 620,000 During the year, the following transactions occurred. Jan. 15 Declared a $0.70 cash dividend per share to stockholders of record on January 31, payable February 15. Feb. 15 Paid the dividend declared in January. Apr. 15 Declared a 10% stock dividend to stockholders of record on April...
1.On June 1, 2019, Lilo Inc. announces a 3:1 stock split on its 30,000 shares of...
1.On June 1, 2019, Lilo Inc. announces a 3:1 stock split on its 30,000 shares of $6 par value common stock outstanding. The memo announcing the split will include information about the increase in the number of stocks outstanding which will be:  * $2 $18 10,000 shares 90,000 shares 2.On the dividend payment date * a dividend becomes a current obligation no entry is required an entry may be required if it is a stock dividend dividends payable is debited 3.ABC...
On January 1, 2020, Samsung Corporation has 400,000 shares of $3 par value common stock outstanding....
On January 1, 2020, Samsung Corporation has 400,000 shares of $3 par value common stock outstanding. On the same date the corporation’s board of directors declares a 12% stock dividend to be issue on March 2, 2020. On the declaration date, the corporation’s common stock fair market value is $4. On declaration date, the corporation will record: * Debit Stock Dividend $144,000 Debit Stock Dividend $192,000 Credit Stock Dividend $144,000 Credit Stock Dividend $192,000 A Company has 30,000 shares of...
Swifty Company reported the following amounts in the stockholders’ equity section of its December 31, 2019,...
Swifty Company reported the following amounts in the stockholders’ equity section of its December 31, 2019, balance sheet. Preferred stock, 10%, $100 par (10,000 shares authorized, 1,800 shares issued) $180,000 Common stock, $5 par (93,000 shares authorized, 18,600 shares issued) 93,000 Additional paid-in capital 130,000 Retained earnings 467,000    Total $870,000 During 2020, Swifty took part in the following transactions concerning stockholders’ equity. 1. Paid the annual 2019 $10 per share dividend on preferred stock and a $2 per share dividend...
Question 5 On January 1 Weiss Corporation had 60,000 shares of no-par common stock issued and...
Question 5 On January 1 Weiss Corporation had 60,000 shares of no-par common stock issued and outstanding. The stock has a stated value of $5 per share. During the year, the following transactions occurred: Apr. 1 Issued 10,000 additional shares of common stock for $10 per share. June 15 Declared a cash dividend of $1.00 per share to stockholders of record on June 30. July 10 Paid the $1.00 cash dividend. Dec. 1 Issued 4,000 additional shares of common stock...
Balance Sheet Debit/Credit T-Chart 1. Journalize the transactions. (Include entries to close net income and dividends...
Balance Sheet Debit/Credit T-Chart 1. Journalize the transactions. (Include entries to close net income and dividends to Retained Earnings.) (Record entries in the order displayed in the problem statement. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.) 2. Enter the beginning balances in the accounts and post the...
1. On October 1, 20X1, ABC Limited makes available bonds that can be purchased by investors...
1. On October 1, 20X1, ABC Limited makes available bonds that can be purchased by investors at a market value of 107. Your company buys a bond with a face or maturity value of $200,000 on that date. The bond pays interest annually on September 30 starting in 20X2. When the bond was purchased, the market interest rate was 2% and the stated or coupon interest rate on the bond was 4%. Your company has a year-end on December 31,...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT