Hauswirth Corporation sold (or exchanged) a warehouse in year 0. Hauswirth bought the warehouse several years ago for $65,000, and it has claimed $23,000 of depreciation expense against the building. (Loss amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable. Round your final answers to the nearest whole dollar amount.) Required: a. Assuming that Hauswirth receives $50,000 in cash for the warehouse, compute the amount and character of Hauswirth's recognized gain or loss on the sale. b. Assuming that Hauswirth exchanges the warehouse in a like-kind exchange for some land with a fair market value of $50,000, compute Hauswirth's realized gain or loss, recognized gain or loss, deferred gain or loss, and basis in the new land. c. Assuming that Hauswirth receives $20,000 in cash in year O and a $50,000 note receivable that is payable in year 1, compute the amount and character of Hauswirth's gain or loss in year 0 and in year 1.

Hauswirth Corporation sold (or exchanged) a warehouse in year 0. Hauswirth bought the warehouse several years ago for $65,000, and it has claimed $23,000 of depreciation expense against the building. (Loss amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable. Round your final answers to the nearest whole dollar amount.) Required: a. Assuming that Hauswirth receives $50,000 in cash for the warehouse, compute the amount and character of Hauswirth's recognized gain or loss on the sale. b. Assuming that Hauswirth exchanges the warehouse in a like-kind exchange for some land with a fair market value of $50,000, compute Hauswirth's realized gain or loss, recognized gain or loss, deferred gain or loss, and basis in the new land. c. Assuming that Hauswirth receives $20,000 in cash in year O and a $50,000 note receivable that is payable in year 1, compute the amount and character of Hauswirth's gain or loss in year 0 and in year 1.

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

Alfredo Company purchased a new 3-D printer for $90,000. This printer is expected to last for ten years, at which time, Alfredo believes it will be able to sell the printer for $15,000. Calculate yearly depreciation using the double-declining-balance method. PLEASE NOTE: All whole dollar amounts will be with "$" and commas as needed (i.e. $12,345). Year 1 Depreciation: ____________________ Year 2 Depreciation: ____________________ Year 3 Depreciation: ____________________ Year 4 Depreciation: ____________________ Year 5 Depreciation: ____________________ Year 6 Depreciation: ____________________ Year 7 Depreciation: ____________________ Year 8 Depreciation: ____________________ Year 9 Depreciation: ____________________ Year 10 Depreciation: ___________________
On June 1, 2022, Leo purchased and placed in service a new car that cost $79,600. The business use percentage for the car is always 100%. He does not elect § 179 expensing, and does not claim any available additional first-year depreciation. If required, round your answers to the nearest dollar. Click here to access the depreciation table of the textbook. Click here to access the limits for certain automobiles. a. What MACRS convention applies to the new car? Half-year b. Is the automobile considered "listed property"? Yes c. Leo's cost recovery deduction in 2022 is $ and for 2023 is $
Alfredo Company purchased a new 3-D printer for $90,000. This printer is expected to last for ten years, at which time, Alfredo believes it will be able to sell the printer for $15,000. Calculate yearly depreciation using the double-declining-balance method. PLEASE NOTE: All whole dollar amounts will be with "$" and commas as needed (i.e. $12,345). Year 1 Depreciation: _________________ Year 2 Depreciation: _________________ Year 3 Depreciation: _________________ Year 4 Depreciation: _________________ Year 5 Depreciation: _________________ Year 6 Depreciation: _________________ Year 7 Depreciation: _________________ Year 8 Depreciation: _________________ Year 9 Depreciation: _________________ Year 10 Depreciation: _________________
Salem Amusement Park paid $400,000 for a concession stand. Salem started out depreciating the building using the straight-line method over 20 years with a residual value of zero. After using the concession stand for four years, Salem determines that the building will remain useful for only four more years. Record Salem's depreciation on the concession stand for year five using the straight-line method. (Record debits first, then credits. Exclude explanations from any journal entries.) Date Journal Entry Accounts Debit Credit
Jake parchased a $235,000 crane for his constraction business. He sold the crane for $175,000 after taking $115,000 of depreciation. Assume take is What is the amount of gain or loss on the sale?
Please help ))()()()))()()())
Hampton Inc. purchased a machine to use in its business. The machine is estimated to have an economic life of 10 (ten) years before it becomes obsolete. The company expects to use the machine for 4 (four) years before it sells the machine to another company. Hampton uses the straight-line depreciation method. Question: How many years should Hampton depreciate this asset over? (4,7,10, or 14)
For the next two questions, a "+" sign is optional for any answer that is a net cash inflow, but a "-" sign is mandatory for any answer that is a net cash outflow. Reebok Ltd is purchasing a $7.7 million machine, which will cost the firm an additional $46,000 to have the machine transported and installed ready for use. The machine is depreciated to a value of zero over a tax life of 4 years via the straight-line method. It will also be worthless in the salvage market at this time. The machine is expected to generate incremental revenues of $4.4 million per year for the firm while also causing incremental costs of $1.6 million per year. Reebok's marginal tax rate is 37.5%. You are forecasting incremental free cash flows for Reebok Ltd (a) What is the incremental free cash flow associated with the new machine at t=0? The free cash flow at t=0 will be $ (Round your answer to the nearest dollar) (b) What is the annual incremental free cash flows each year from t=1 to t=4? The annual free…
On 1 July 2022, your company acquired a machine for $103,000 on credit and decided to depreciate it for 25 years with no residual amount. The credit was taken from a local bank that charges 4.2% per annum with payments every year on 30 June. Assume that the fair values of this asset were: Date Fair Value 1/7/2023 $105,000 30/11/2023 $98,000 30/6/2024 $80,000 a. Using the cost model, prepare the relevant journal entries from the date of acquisition to 30 June 2023 b.Using the revaluation model, prepare the relevant journal entries from the date of acquisition to 30 June 2023.
On June 5, 2022, Leo purchased and placed in service a new car that cost $75,000. The business use percentage for the car is always 100%. Leo does not elect § 179 expensing, and does not claim any available additional first-year depreciation. If required, round your answers to the nearest dollar. Click here to access the depreciation table to use for this problem. Click here to access the limits for certain automobiles. a. What MACRS convention applies to the new car? Half-year b. Is the automobile considered "listed property"? Yes c. Leo's cost recovery deduction in 2022 is $ 10,200 X and for 2023 is $ 16,400 X.
Mill Creek Golf Club, Inc. purchased a computer for $2,900, debiting Computer Equipment. During 2022 and 2023, Mill Creek Golf Club, Inc. recorded total depreciation of $2,300 on the computer. On January 1, 2024, Mill Creek Golf Club, Inc. traded in the computer for a new one, paying $2,700 cash. The fair market value of the new computer is $4,500. Journalize Mill Creek Golf Club, Inc.'s exchange of computers. Assume the exchange had commercial substance. Let's begin by calculating the gain or loss on the exchange of computer equipment on January 1. Market value of assets received Less: Book value of asset exchanged Cash paid Gain or (Loss) Journalize Mill Creek Golf Club, Inc.'s exchange of computers. (Record a single compound journal entry. Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Jan. 1 Accounts and Explanation Debit Credit
H6. Denver Inc. has an old computer system. The computer originally costs Denver $90,000 and its current book value is $35,000. Answer the following questions: Do not use the account name of book value. There is no such account name as book value in accounting* 1) What is accumulated depreciation on the Denver's computer? 2) Journal entry if Denver discards the computer (for nothing). 3) Journal entry if Denver sells the computer for $90,000. Show proper calculation