On dec. 15, 2018, jack’s tax prep, a cash-method taxpayer, prepaid $5,000 worth of deductible interest on a business loan. the interest won’t accrue until january 2019. jack’s tax prep will be displaying at a tradeshow in january 2019. on dec. 16, 2018, jack’s prepaid the $4,000 trade show booth rental expense. use of the booth will occur in january 2019. in addition, on dec. 28, 2018, ed’s equipment repaired some equipment in jack’s office and billed jack’s $2,000. jack’s received the invoice on dec. 28, 2018 and paid the $2,000 invoice on jan. 29, 2019. how much of the $11,000 in deductible business expenses may jack’s tax prep deduct in 2018? in addition to the $11,000 in expenses, in dec. 2018, jack’s prepaid two years’ worth of office rent ($4,000/month * 24 months = $96,000). the rent covers jan. 1, 2019 through dec. 31, 2020. how much of the $96,000 prepaid rent can jack’s deduct in 2018? instead, jack’s only prepaid six months’ worth of office rent ($4,000/month * 6 months = $24,000) in dec. 2018. the rent covers jan. 1, 2019 through june. 30, 2019. how much of the $24,000 prepaid rent can jack’s deduct in 2018?

Georgia orchards produced a good crop of peaches this year. after preparing the following income statement, the company is concerned about the net loss on its no. 3 peaches. georgia orchards income statement for year ended december 31, 2017 no. 1 no. 2 no. 3 combined sales (by grade) no. 1: 300,000 ibs. @ $1.50/lb $ 450,000 no. 2: 300,000 ibs. @ $1.00/lb $ 300,000 no. 3: 750,000 ibs. @ $0.25/lb $ 187,500 total sales $ 937,500 costs tree pruning and care @ $0.30/ib 90,000 90,000 225,000 405,000 picking, sorting, and grading @ $0.15/ib 45,000 45,000 112,500 202,500 delivery costs 15,000 15,000 37,500 67,500 total costs 150,000 150,000 375,000 675,000 net income (loss) $ 300,000 $ 150,000 $ (187,500 ) $ 262,500 in preparing this statement, the company allocated joint costs among the grades on a physical basis as an equal amount per pound. the company’s delivery cost records show that $30,000 of the $67,500 relates to crating the no. 1 and no. 2 peaches and hauling them to the buyer. the remaining $37,500 of delivery costs is for crating the no. 3 peaches and hauling them to the cannery. required: 1. prepare reports showing cost allocations on a sales value basis to the three grades of peaches. separate the delivery costs into the amounts directly identifiable with each grade. then allocate any shared delivery costs on the basis of the relative sales value of each grade. (do not round intermediate calculations.)