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

See similar textbooks

Similar questions

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.
In 2020, a business suffered the theft of a truck. Before the theft, the fair market value of the truck was $25,000. The adjusted basis of the truck is $18,000 and the insurance reimbursement is $11,000. What is the amount of the business casualty loss?
On January 1, 2019, Villanueva Company classified noncurrent assets as held for sale that had a carrying amount of P2,500,000. On this date, the assets are expected to be sold for P2,300,000. Reasonable disposal cost to be incurred upon sale was expected at P100,000. As of December 31, 2019, the asset had not been sold. After considering its options, management decided to put back the noncurrent asset for use in operations. On that date, Villanueva's financial managers estimated the noncurrent asset was now expected to be selling at P1,800,000 with the disposal cost of P50,000, while depreciation for 2019 was computed at P500,000 if the noncurrent asset was not classified as held for sales. At how much should the asset be recorded upon reclassification as "held for use" on December 31, 2019 A. 2,500,000 B. 2,200,000 C. 2,000,000 D. 1,950,000
31 When a noncurrent asset is classified as held for sale a. depreciation ceases at the date it is classified as held for sale b. depreciation continues until the asset’s actual sale c. depreciation continues until its carrying value exceeds its fair value less cost to sell d. it is almost certain that the asset will be sold in a short period of time.
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
What should be done with the transaction on August 2019? a. Disclose as provision since the occurrence is probable. b. Recognize as provision since it is probable that Buwis Buhay will lose the case. c. Disclose as contingent asset because even if it is probable that the company will be successful, contingent asset is never recognized unless realized. d. Recognize as contingent liability since it is probable that Buwis Buhay will be indebted.
Sabiha Purchased an Equipment on 1st January 2016 at a cost of OMR 200,000. The equipment has zero residual value and was to be depreciated over a estimated life of 10 years. On 31st December 2019, the asset revalues to fair value of OMR 160,000. Calculate the Revaluation Gain/ (Loss) on the asset?
On January 1, 2001, MM Inc. constructed a building classified as owner occupied property at a cost of P3,000,000 with no residual value and useful life of 10 years. On December 31, 2002, there is objective evidence of impairment of the building and its value in use is measured at P1,600,000 while its fair value less cost to sell is at P1,500,000. On December 31, 2004, the value in use of the building is at P2,300,000 while its fair value less cost to sell is P1,700,000. Required: Based on the result of your audit, determine the following:__________1. Impairment loss for the year ended December 31, 2002__________2. Carrying amount of building on December 31, 2002__________3. Depreciation expense for the year ended December 31, 2003__________4. Carrying amount of building on December 31, 2004__________5. Gain on reversal of impairment loss for the year ended December 31, 2004__________6. Depreciation expense for the year ended December 31, 2005
Assume REH AG, a hypothetical company, incurs expenditures of AC1,000 per month during the fiscal year ended December 31, 2019 to develop software for internal use. Under IFRS, the company must treat the expenditures as an expense until the software meets the criteria for recognition as an intangible asset, after which time the expenditures can be capitalized as an intangible asset. 1 What is the accounting impact of the company being able to demonstrate that the software met the criteria for recognition as an intangible asset on February 1 versus December 1? 2 How would the treatment of expenditures differ if the company reported under US GAAP and it had established in 2018 that the project was likely to be completed and the software used to perform the function intended?
D1.
What amount of gain on reversal of impairment loss should be recognized in 2020?