4. Which of the following situations would not be permitted to defer the recognition of any recapture that might arise from the disposition of an asset? A building that was used for income earning purposes was destroyed in a flood. Insurance proceeds were received which generated recapture. A new building was built 18 months later. B A piece of equipment that belonged to a company was stolen in November 2019. Insurance proceeds were received which generated recapture. The equipment was replaced in December of 2020. C A piece of equipment that belonged to a construction company was sold in June 2019. The proceeds from the sale generated recapture. A new piece of equipment was purchased in January of 2020. The company's fiscal year-end is December 31st. D. A building that was used for income earning purposes was sold in December 2019. The proceeds from the sale generated recapture. A new building was purchased in April 2020. The company's fiscal D year-end is December 31st. none of the above

4. Which of the following situations would not be permitted to defer the recognition of any recapture that might arise from the disposition of an asset? A building that was used for income earning purposes was destroyed in a flood. Insurance proceeds were received which generated recapture. A new building was built 18 months later. B A piece of equipment that belonged to a company was stolen in November 2019. Insurance proceeds were received which generated recapture. The equipment was replaced in December of 2020. C A piece of equipment that belonged to a construction company was sold in June 2019. The proceeds from the sale generated recapture. A new piece of equipment was purchased in January of 2020. The company's fiscal year-end is December 31st. D. A building that was used for income earning purposes was sold in December 2019. The proceeds from the sale generated recapture. A new building was purchased in April 2020. The company's fiscal D year-end is December 31st. none of the above

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Mawn Company bought and and built a warehouse during 2019. It improperly debited the following related costs to an account titled Land and Buildings: Prepare the correcting entries on December 31, 2019, to properly reclassify the preceding items.
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In 2019, A.M.E. Corporation's accountant incorrectly expensed the cost of a major repairs to one of its equipment. The repairs would prolong the life of the asset beyond its current estimated useful life. Which of the following is (are) true? Question 18 options: Income in 2019 is understated. Income in future years is overstated. Corporation's assets in 2019 will be understated. All of these answer choices are true
A tornado destroys your office building on 6/1/2019. Here are the facts $100,000 Historical cost of office building $40,000 depreciation taken on office building $250,000 fair market value before tornado $0 fair market value after the tornado The building was insured for 80% of the fair Market value of the building Insurance proceeds were received on 7/15/2020 What is the realized gain and when do the proceeds have to be reinvested to avoid gain recognition under IRC §1033? A. $100,000 realized gainInsurance proceeds must be reinvested in like kind property by 12/31/2021B. $190,000 realized gainInsurance proceeds must be reinvested in like kind property by 12/31/2021C. $100,000 realized gainInsurance proceeds must be reinvested in like kind property by 12/31/2022D. None of the above
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In determining the basis of like-kind property received, postponed losses are: O Subtracted from the basis of the old property. O Added to the fair market value of the like-kind property received. O Subtracted from the fair market value of the like-kind property received. O Added to the basis of the old property. O NONE of the choices are correct
On December 31, 2019, Aquinas Company had equipment that had a carrying amount of $300,000 which the company wrote down to its $250,000 fair value. At the end of 2020 it was determined that the fair value of the equipment had risen to $320,000. At December 31, 2020, assuming Aquinas does not intend to dispose of the equipment, how should Aquinas record the change in fair value of the equipment? A. The carrying amount of the equipment should not change except for the depreciation taken in 2020. B. The equipment should reflect the new cost basis of $300,000. C. The equipment should reflect the new cost basis of $320,000. D. The equipment should reflect the new cost basis of $270,000.