in November 4, 2019, Blue Company acquired an asset (27.5-year residential real property) for $200,000 for use in its business. In 2019 nd 2020, respectively, Blue deducted $642 and $5,128 of cost recovery. These amounts were incorrect; Blue applied the wrong ercentages (i.c., those for 39-year rather than 27.5 year assets). Blue should have taken $910 and $7,272 cost recovery in 2019 and 020, respectively. On January 1, 2021, the asset was sold for $180,000. I required, round all computations to the nearest dollar. lick here to access the depreciation tables in the textbook. The adjusted basis of the asset at the end of 2020 is $ The cost recovery deduction for 2021 is s -The loss ✓on the sale of the asset in 2021 is s

in November 4, 2019, Blue Company acquired an asset (27.5-year residential real property) for $200,000 for use in its business. In 2019 nd 2020, respectively, Blue deducted $642 and $5,128 of cost recovery. These amounts were incorrect; Blue applied the wrong ercentages (i.c., those for 39-year rather than 27.5 year assets). Blue should have taken $910 and $7,272 cost recovery in 2019 and 020, respectively. On January 1, 2021, the asset was sold for $180,000. I required, round all computations to the nearest dollar. lick here to access the depreciation tables in the textbook. The adjusted basis of the asset at the end of 2020 is $ The cost recovery deduction for 2021 is s -The loss ✓on the sale of the asset in 2021 is s

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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Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

Question

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On November 4, 2019, Blue Company acquired an asset (27.5-year residential real property) for $200,000 for use in its business. In 2019
and 2020, respectively, Blue deducted $642 and $5,128 of cost recovery. These amounts were incorrect; Blue applied the wrong
percentages (i.c., those for 39 year rather than 27.5 year assets). Blue should have taken $910 and $7,272 cost recovery in 2019 and
2020, respectively. On January 1, 2021, the asset was sold for $180,000.
If required, round all computations to the nearest dollar.
Click here to access the depreciation tables in the textbook.
a. The adjusted basis of the asset at the end of 2020 is $
b. The cost recovery deduction for 2021 is $
c. The loss on the sale of the asset in 2021 is

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