Solution libraryQuestion: 149219
Question(s) / Instruction(s):
&X Co. is a retail store owned by Paul Tuner. During the month of November, the equity accounts were affected by the following events:
Nov.9 Turner invested an additional $15,000 in the business.
Nov.15 Tuner withdrew $1,500 for his salary for the first two weeks of the month.
Nov.30 Turner withdrew $1,500 for his salary for the second two weeks of the month.
Nov.30 S&X distributed $1,000 or earnings to Turner.
a.Assuming that the business is organized as a sole proprietorship:
1.Prepare the journal entries to record the above events in the accounts of S&X.
2.Prepare the closing entries for the month of November. Assume that after closing all of the revenue and expense accounts, the Income Summary account has a balance of $5,000.
3.Prepare the journal entries to record above events. Assume that revenue & Expense acct is $2000. Income tax Expense acct to income summary acct. Income tax rate is at 30%.
4. Explain the causes of the differences in the net income between S&X as a sole propietorship and S&X as a corporation.
5. Describe the effects of the business operations on Turners individual income tax return, assuming that the business is organized as 1)a sole proprietorship and 2) a corporation.