Business K exchanged an old asset (FMV $95,000) for a new asset (FMV $95,000). Business K's tax basis in the old asset was$113,000.Required:a. Compute Business K's realized loss, recognized loss, and tax basis in the new asset assuming the exchange was a taxabletransaction.b. Compute Business K's realized loss, recognized loss, and tax basis in the new asset, assuming the exchange was a nontaxabletransaction.c. Six months after the exchange, Business K sold the new asset for $103,000 cash. How much gain or loss does Business Krecognize if the exchange was taxable? How much gain or loss if the exchange was nontaxable?Complete this question by entering your answers in the tabs below.Required A Required B Required CCompute Business K's realized loss, recognized loss, and tax basis in the new asset assuming the exchange was a taxabletransaction.Note: Losses should be indicated with a minus sign.Realized lossRecognized lossTax basisAmount

When an asset is sold for less than its original value, a realized loss happens; a recognized loss…

Answered: Business K exchanged an old asset (FMV…

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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Bloomington Inc. exchanged land for equipment and $2,600 in cash. The book value and the fair value of the land were $105,500 and $89,100, respectively.Assuming that the exchange has commercial substance, Bloomington would record equipment and a gain/(loss)on exchange of assets in the amounts of: Equipment Gain/(loss) a. $ 86,500 $ 2,600 b. $ 105,500 $ (2,600 ) c. $ 86,500 $ (16,400 ) d. None of these answer choices are correct. Option C Option D Option A Option B
H1.
Lento Incorporated owned machinery with a $30,000 initial cost basis. Accumulatedbook depreciation with respect to the machinery was $12,000, and accumulated taxdepreciation was $19,100. Lento sold the machinery for $13,000 cash. Lento’s marginaltax rate is 21 percent.Required:b. Compute Lento’s tax gain or loss on the sale.c. Compute Lento’s after-tax cash flow from the sale.
Qw.19a.
Tesco Incorporated and WW Company exchanged like-kind assets. Tesco's asset had an $82,000 FMV and $55,900 adjusted tax basis, and WW's asset had an $85,500 FMV and a $27,200 adjusted tax basis. Tesco paid $8,500 cash to MW as part of the exchange. Calculate a) WW's and Tesco's realized and recognized gain b) WW's and Tesco's basis for newly acquired asset
During 2020, Sienar Systems, Inc purchased Correalian Drives, Inc. (one of its suppliers) using the assets method. As a part of this business, it was determined the company purchased 1,200,000 of Goodwill. a. How much is the book to tax difference with this purchase in 2020 and is it temporary or permanent?
Firm M exchanged an old asset with a $16,600 tax basis and a $39,000 FMV for a new asset worth $27,500 and $11,500 cash. Required: a. If the exchange is nontaxable, compute Firm M's realized and recognized gain and tax basis in the new asset. b. How would your answers change if the new asset were worth only $16,000, and Firm M received $23,000 cash in the exchange? Complete this question by entering your answers in the tabs below. Required A Required B If the exchange is nontaxable, compute Firm M's realized and recognized gain and tax basis in the new asset. Amount Realized gain Recognized gain Tax basis
it says answer is wrong
Subject: acounting
Alamos Co. exchanged equipment and $17,000 cash for similar equipment. The book value and the fair value of the old equipment were $80,700 and $90,700, respectively. Assuming that the exchange has commercial substance, Alamos would record a gain/(loss) of:
China Inn and Midwest Chicken exchanged assets. China Inn received delivery equipment and gave restaurant equipment. The fair value and book value of the restaurant equipment were $23,500 and $15,400 (original cost of $42,000 less accumulated depreciation of $26,600), respectively. To equalize market values of the exchanged assets, China Inn paid $7,800 in cash to Midwest Chicken. Record the gain or loss for China Inn on the exchange of the equipment. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet Record the gain or loss for China Inn on the exchange of the equipment. Note: Enter debits before credits Transaction General Journal Debit Credit < Prev 7 of 7 Next
[The following information applies to the questions displayed below.] What book-tax differences in year 1 and year 2 associated with its capital gains and losses would DEF Incorporated report in the following alternative scenarios? Identify each book-tax difference as favorable or unfavorable and as permanent or temporary. Note: Leave no answer blank. Enter zero if applicable and select "Not applicable" if no effect. a. In year 1, DEF recognized a loss of $15,000 on land that it had held for investment. In year 1, it also recognized a $30,000 gain on equipment it had purchased a few years ago. The equipment sold for $50,000 and had an adjusted basis of $20,000. DEF had deducted $40,000 of depreciation on the equipment. In year 2, DEF recognized a capital loss of $2,000. Year 1 Year 2 X Answer is complete but not entirely correct. Favorable or Temporary or Unfavorable Permanent Unfavorable Infavorable Book-tax Difference $ 0X 0 Temporary Temporary

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