Problems
1. Danping Corporation, a calendar year taxpayer, sells lawn furniture through big box store. It manufactures some of the furniture and imports some from unrelated foreign producers. For tax year 2015, Danping records reveal the following information:
Furniture Sold
|
Manufactured
|
Imported
|
|
Gross Receipts
|
$2,600,000
|
$1,600,000
|
|
CGS
|
1,100,000
|
850,000
|
Danping also has selling and marketing expenses of $700,00 and administrative expenses of $300,00. Under the simplified deduction method what is Danping's:
DPGR? QPAI?DPAD?
2. Assume the same facts as in Problem 40, except that Danping's records do not identify its CGS (as between manufactured and imported furniture) but reflect an unallocated amount of $1,950,000. Further assume that Danping is qualified to (and does) use the small business simplified method of allocating CGS and other expenses. What is Danping's:
a. QPAI?
b. DPAD?