Answer Happy

ACC 650 1 Take-Home Problems
Instructions:
There are two problems, one on each page.
Submit your computations and solutions in Canvas as one
Excel file. Use one file that contains both solutions on
different Excel sheets; do not try to submit two separate Excel
files. Clearly indicate your final answers.
The solutions in your Excel file must show all of your
computations leading up to the answers, and your work must be very
organized with every number labeled.
Follow the examples in the textbook for the proper
format.
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Problem
1.
25 Points
Source and Application of Funds Method
Find the possible over/understatement of taxable income
given the following:
Taxable income per tax return $60,000
Increase in mortgage payable $150,000
Increase (purchase) in real estate
$700,000
Increase in cash on hand $30,000
Decrease in bank balance $10,000
Gift received $15,000
Personal living expenses $25,000
Income taxes paid $17,000
Increase in accounts receivable
$220,000
Decrease in securities $35,000
Tax exempt interest received $1,000
Gifts made (paid) $8,000
Increase in inventory $5,000
Itemized deductions $28,000
Inheritance received $9,000
Show your complete computations in a schedule showing
sources and uses of funds as shown in Figure 6.3 in your textbook
(Source and Application of Funds Format).
Clearly show the possible over/understatement of taxable
income.