During the current year, a business sells equipment for $330,000. The equipment cost $300,000 when purchased and placed in service two years ago and $90,000 of depreciation deductions were allowed. The results of the sale are A) ordinary income of $120,000. B) Sec. 1231 gain of $120,000. C) ordinary income of $90,000 and LTCL of $30,000. D) ordinary income of $90,000 and Sec. 1231 gain of $30,000.
Q: Need answer the question don't use ai
A: Step 1: Define Manufacturing overheadManufacturers' overheads are indirect; hence they are a settled…
Q: Firm B wants to hire Ms. Ali to manage its advertising department. The firm offered Ms. Ali a…
A: To solve this problem, we need to calculate the Net Present Value (NPV) for both Ms. Ali and Firm B.…
Q: 14
A: 1. First, let's identify the important information: - Selling price: $2,300 - Original purchase…
Q: Need help
A: Step 1: Define Retained EarningsThe amount that a firm retains after paying all of its financial…
Q: None
A: To solve this problem, let's calculate the free cash flow using the given information. Free cash…
Q: None
A: Step 1: Define Variable CostingOne of the costing methods used in cost accounting is variable…
Q: None
A: August 2: Investment of Cash and Equipment into the BusinessOn August 2, the business owner invested…
Q: not use ai please
A: Step 1: Calculate the Weighted Average ExpendituresTo determine the amount of interest to be…
Q: not use ai please
A: Approach to solving the question:Understand the Basic Accounting Equation:The basic accounting…
Q: None
A: Step 1: Plantwide Predetermined Overhead Rate (per Machine-Hour):The total manufacturing overhead…
Q: Need answer please
A: a. To calculate the value of the shareholders' equity account, we can use the accounting…
Q: need answer please
A: The high-low method is a simple way to estimate a cost equation by identifying the highest and…
Q: tutor please solve
A: Inventory accounting is a critical aspect of financial management for companies, especially in…
Q: Solve this problem
A: To determine the operating cash flow (OCF) for Kerber's Tennis Shop, Inc., we use the cash flow…
Q: Assume that a department has 1,900 units completed and 400 units that are 25% complete for the month…
A: The problem is asking us to calculate the cost of ending work-in-process (EWIP). EWIP is the value…
Q: Provide solution
A: The problem requires the determination of the debt-equity ratio. Given are as follows: Profit margin…
Q: 14. Is the following statement correct regarding exclusions or deductions. A. an HSA contribution…
A: Before we can answer the question, we need to understand the terms used. A deduction is an amount…
Q: None
A: John Dunn Realty CompanyBalance SheetJuly 31, 2021(Amounts in millions)AssetsLiabilities and…
Q: GuideWell has the following balances on their Trial Balance in random order. Each account contains…
A: Step 1: Total Assets and LiabilitiesFirst, let's categorize the accounts into assets and…
Q: Select the account classification that matches with the description. Descriptions a. Sales of…
A: Sales of products or services refer to the money a company earns from its core business activities,…
Q: 16
A: Step 1: Understand the terms.Amount Realized: The cash or fair market value received from the sale…
Q: need help with this question please provide answer
A: Step 1: Definition of Overhead Cost:A company's overhead cost has two types of transactions: actual…
Q: None
A: Step 1: Define Operating Cash FlowThe operating cash flow for a firm can be ascertained by using the…
Q: Provide correct net realizable value of accounts receivable?
A: Step 1: Define Accounts ReceivableThe accrual basis suggests that when revenue is earned but not…
Q: l9
A: Explanation of Target Cost:Target cost is a cost management strategy used by businesses to ensure…
Q: Hi expart Provide solution
A: You are asked to calculate the depreciation for a piece of equipment that costs $1,712,000, has a…
Q: What is total equity ?
A: Step 1: Introduction to the Balance SheetA balance sheet records the company's total assets and…
Q: Need Answer for a and b both
A: Step 1: Definition of Manufacturing Overhead:Manufacturing overhead requires application because it…
Q: On 1st April 2016, Jaitra consigned some smart phones to Ronak at invoice price of Rs. 9,999 each.…
A: 1. Understanding the Invoice Price and Actual Cost:Invoice Price per phone: Rs. 9,999.Profit margin…
Q: Need answer the question
A: Step 1: Define Set off lossesIt means adjusting the losses incurred with the profit earned. Losses…
Q: None
A: Accounting TreatmentGoodwill/Bargain Purchase Gain: Since the fair value of Mason's net assets…
Q: 16. Is this statement true about underpayment penalties. A. The taxpayer will never receive an…
A: The underpayment penalty is a fine that the Internal Revenue Service (IRS) can charge taxpayers who…
Q: None
A: Step 1: Define Return On AssetsThe return on assets ratio is a profitability ratio that determines…
Q: Give true solution
A: Step 1: Define Net IncomeNet income is calculated as the difference between revenues and expenses.…
Q: Step by step answer want
A: Step 1: Definition of Work in Process:in cost accounting, work-in-process inventory refers to those…
Q: Need answer the question
A: Step 1: Introduction to the Variable CostingVariable costing is one of the methods used in cost…
Q: ???
A: Part 1: Operating Cash Flow for Blue Sky AirlinesTo calculate the operating cash flow, use the…
Q: provide answer from information
A: Step 1: Understand to the Variance Analysis:The difference between the standard cost and the actual…
Q: Hi expart Provide solution
A: Step 1: The calculation of the operating cashflows AB1Sales $ 36,000.00 2Less: COSG $…
Q: Average credit given by Pesh at a certain trading period to his debtors was 25 days, and the average…
A: Step 1: Definition of Gross Sales:Gross sales are the total amount of sales that occurred during an…
Q: At the beginning of 2022, Metatec Incorporated acquired Ellison Technology Corporation for $660…
A:
Q: Don't use ai
A: Step 1:Predetermined overhead rate is a single overhead rate used to record manufacturing overhead…
Q: solve this one with correct option
A: Step 1: Definition of Manufacturing Cost:Total manufacturing cost can be defined as the total…
Q: Franklin Company incurs annual fixed costs of $79,650. Variable costs for Franklin’s product are…
A: The contribution margin per unit is calculated by subtracting the variable cost per unit from the…
Q: I need typing clear urjent no chatgpt used i will give 5 upvotes pls full explain
A: Approach to solving the question: Detailed explanation: Examples: Key references:
Q: Use the following financial statements for Lake of Egypt Marina, Incorporated LAKE OF EGYPT MARINA,…
A:
Q: Give correct solution for this question
A: To find the ratio of the market value of equity to its book value.Given:Current assets book value =…
Q: Required information [The following information applies to the questions displayed below.] On…
A: Step 1: Calculation of annual depreciation.Using straight line method,Depreciation expense = (Asset…
Q: Help me with this question
A: Step 1: Cash Outflows:Initial investment (cash outflow) is $6,000. The present value factor (PVF) at…
Q: Provide solution
A: Long term debt ratio = Current ratio = current assets/current liabilities = 1.30Now current…
None
Step by step
Solved in 2 steps
- Cox Construction, a company in its 10th year of business, purchased a piece of equipment on April 1, year 9, for 20,000. Cox has used it for business purposes since the initial purchase date. The company depreciated the equipment using the MACRS half-year table for 5-year assets. For tax purposes, what is the amount of accumulated depreciation expense for the equipment as of December 31, year 10? a. 6,000 b. 10,400 c. 11,600 d. 12,800Turnip Company purchased an asset at a cost of 10,000 with a 10-year life during the current year. Turnip uses differing depreciation methods for financial reporting and income tax purposes. The depreciation expense during the current year for financial reporting is 1,000 and for income tax purposes is 2,000. Turnip is subject to a 30% enacted future tax rate. Prepare a schedule to compute Turnips (a) ending future taxable amount, (b) ending deferred tax liability, and (c) change in deferred tax liability (deferred tax expense) for the current year.Akron Incorporated purchased an asset at the beginning of Year 1 for 375,000. The estimated residual value is 15,000. Akron estimates that the asset has a service life of 5 years. Calculate the depreciation expense using the sum-of-the-years-digits method for Years 1 and 2 of the assets life.
- Hunter Company purchased a light truck on January 2, 2019 for 18,000. The truck, which will be used for deliveries, has the following characteristics: Estimated life: 5 years Estimated residual value: 3,000 Depreciation method for financial statements: straight-line method Depreciation for income tax purposes: MACRS (3-year life) From 2019 through 2023, each year, Hunter had sales of 100,000, cost of goods sold of 60,000, and operating expenses (excluding depreciation) of 15,000. The truck was disposed of on December 31, 2023, for 2,000. Required: 1. Prepare an income statement for financial reporting through pretax accounting income for each of the 5 years, 2019 through 2023. 2. Prepare, instead, an income statement for income tax purposes through taxable income for each of the 5 years, 2019 through 2023. 3. Compare the total income for all 5 years under Requirements 1 and 2.Bliss Company owns an asset with an estimated life of 15 years and an estimated residual value of zero. Bliss uses the straight -line method of depreciation. At the beginning of the sixth year, the assets book value is 200,000 and Bliss changes the estimate of the assets life to 25 years, so that 20 years now remain in the assets life. Explain how this change will be accounted for in Blisss financial statements, and compute the current and future annual depreciation expense.Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the purchase of the printer impacts not only depreciation expense each year but also the assets book value. What amount will be recorded as depreciation expense each year, and what will the book value be at the end of each year after depreciation is recorded?
- Albany Corporation purchased equipment at the beginning of Year 1 for 75,000. The asset does not have a residual value and is estimated to be in service for 8 years. Calculate the depreciation expense for Years 1 and 2 using the double-declining-balance method. Round to the nearest dollar.Susquehanna Company purchased an asset at the beginning of the current year for 250,000. The estimated residual value is 25,000. Susquehanna estimates that the asset will be used for 10 years and uses straight-line depreciation. Calculate the depreciation expense per year.Gray Companys financial statements showed income before income taxes of 4,030,000 for the year ended December 31, 2020, and 3,330,000 for the year ended December 31, 2019. Additional information is as follows: Capital expenditures were 2,800,000 in 2020 and 4,000,000 in 2019. Included in the 2020 capital expenditures is equipment purchased for 1,000,000 on January 1, 2020, with no salvage value. Gray used straight-line depreciation based on a 10-year estimated life in its financial statements. As a result of additional information now available, it is estimated that this equipment should have only an 8-year life. Gray made an error in its financial statements that should be regarded as material. A payment of 180,000 was made in January 2020 and charged to expense in 2020 for insurance premiums applicable to policies commencing and expiring in 2019. No liability had been recorded for this item at December 31, 2019. The allowance for doubtful accounts reflected in Grays financial statements was 7,000 at December 31, 2020, and 97,000 at December 31, 2019. During 2020, 90,000 of uncollectible receivables were written off against the allowance for doubtful accounts. In 2019, the provision for doubtful accounts was based on a percentage of net sales. The 2020 provision has not yet been recorded. Net sales were 58,500,000 for the year ended December 31, 2020, and 49,230,000 for the year ended December 31, 2019. Based on the latest available facts, the 2020 provision for doubtful accounts is estimated to be 0.2% of net sales. A review of the estimated warranty liability at December 31, 2020, which is included in other liabilities in Grays financial statements, has disclosed that this estimated liability should be increased 170,000. Gray has two large blast furnaces that it uses in its manufacturing process. These furnaces must be periodically relined. Furnace A was relined in January 2014 at a cost of 230,000 and in January 2019 at a cost of 280,000. Furnace B was relined for the first time in January 2020 at a cost of 300,000. In Grays financial statements, these costs were expensed as incurred. Since a relining will last for 5 years, Grays management feels it would be preferable to capitalize and depreciate the cost of the relining over the productive life of the relining. Gray has decided to nuke a change in accounting principle from expensing relining costs as incurred to capitalizing them and depreciating them over their productive life on a straight-line basis with a full years depreciation in the year of relining. This change meets the requirements for a change in accounting principle under GAAP. Required: 1. For the years ended December 31, 2020 and 2019, prepare a worksheet reconciling income before income taxes as given previously with income before income taxes as adjusted for the preceding additional information. Show supporting computations in good form. Ignore income taxes and deferred tax considerations in your answer. The worksheet should have the following format: 2. As of January 1, 2020, compute the retrospective adjustment of retained earnings for the change in accounting principle from expensing to capitalizing relining costs. Ignore income taxes and deferred tax considerations in your answer.
- Redbud began operations at the beginning of Year 1, and has one depreciable asset with an original cost of $200, acquired at the start of Year 1. Redbud uses straight-line depreciation over 5 years for financial reporting and MACRS (3-year asset). Information about carrying value and tax basis of the asset is found in the table below. Book Tax Year Depreciation Carrying value MACRS Tax basis 1 40 160 66 134 2 40 120 90 44 3 40 80 30 14 4 40 40 14 5 40 In Years 1 and 2, Redbud had a small amount of positive net income and positive taxable income. In Year 3, Redbud experienced a $2,000 loss for net income. Redbud is not in an industry that is eligible for the carryback option, so Redbud will carry the loss forward. Redbud’s tax rate is 20%. Requirements: Calculate the net operating loss for Year 3. Prepare the journal entry to record income taxes for Year 3. Assume that Redbud only expects to realize 60% of the tax carryforward in future years.…Dain's Diamond Bit Drilling purchased the following assets this year. Assume its taxable income for the year was $53,000 before deducting any $179 expense (assume no bonus depreciation). Asset Purchase Date Original Basis $ 90,000 January 25 July 25 April 22 Drill bits (5-year) Drill bits (5-yoar) Commercial building 95,000 220,000 a) What is the maximum amount of $179 expense Dain may deduct for the year? b) What is Dain's maximum depreciation expense for the year (including $179 expense)? c) If the January drill bits' original basis was $2,375,000, what is the maximum amount of $179 expense Dain may deduct for the year? d) If the January drill bits' basis was $2,495,000, what is the maximum amount of $179 expense Dain may deduct for the year?A company purchased a drill press costing $230,000 in year 0. The drill press, classified as seven-year recovery property, has been depreciated by the MACRS method. If it is sold at the end of three years for (1) $150,000 or (2) $100,000, compute the gains (losses) for each situation. Assume that both capital gains and ordinary income are taxed at 34%.
