Jenkis Corporation sold equipment used in its business for cash. The amount realized was $80,000. The equipment originally cost $140,000, but it had an adjusted basis of $60,000 at the time of the sale. What is the gain or lost realis by Jenkis Corporation?
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- CCC Manufacturing Inc. sold equipment that it uses in its business for $110,000. CCC bought the equipment two years ago for $95,000 and has claimed $10,000 of depreciation expense. What is the amount and character of CCC's gain or loss? $25,000 ordinary gain. $25,000 capital gain. $10,000 ordinary gain and $15,000 §1231 gain. $15,000 ordinary gain and $10,000 §1231 gain.Zenith Corporation sells some of its used store fixtures. The acquisition cost of the fixtures is $13,732, and the accumulated depreciation on these fixtures is $8,504 at the time of sale. The fixtures are sold for $4,206. The value of this transaction in the investing section of the statement of cash flows isCliff Company traded in an old truck for a new one. The old truck had a cost of $300,000 and accumulated depreciation of $60,000. The new truck had an invoice price of $311,000. Huffington was given a $237,000 trade-in allowance on the old truck, which meant they paid $74,000 in addition to the old truck to acquire the new truck. If this transaction has commercial substance, what is the recorded value of the new truck? Multiple Choice $240,000 $300,000 $74,000 $311,000 $314,000
- Eleven years ago, Lynn, Incorporated purchased a warehouse for $315,000. This year,the corporation sold the warehouse to Firm D for $80,000 cash and D’s assumption ofa $225,000 mortgage. Through date of sale, Lynn deducted $92,300 straight-linedepreciation on the warehouse.Required:b. What is the character of this gain?c. How would your answers change if Lynn was a noncorporate business?Hauswirth Corporation sold (or exchanged) a warehouse in year 0. Hauswirth bought the warehouse several years ago for $72.500. and it has claimed $24,800 of depreciation expense against the building. Required: a. Assuming that Houswirth receives $59,700 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 $59,700 compute Houswirth's realized gain or loss, recognized gain or loss, deferred gain or loss, and basis in the new land. c. Assuming that Houswirth receives $26.500 in cash in year 0 and a $57,000 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. Complete this question by entering your answers in the tabs below. Required a Required b Required c Assuming that Hauswirth receives $59,700 in cash for the warehouse, compute the amount…Eleven years ago, Lynn, Incorporated purchased a warehouse for $315,000. This year,the corporation sold the warehouse to Firm D for $80,000 cash and D’s assumption ofa $225,000 mortgage. Through date of sale, Lynn deducted $92,300 straight-linedepreciation on the warehouse.Required:a. Compute Lynn’s gain recognized on the sale of the warehouse.b. What is the character of this gain?c. How would your answers change if Lynn was a noncorporate business?
- (Fair Value Estimate) Killroy Company owns a trade name that was purchased in an acquisition of McClellan Company. The trade name has a book value of $3,500,000, but according to GAAP, it is assessed for impairment on an annual basis. To perform this impairment test, Killroy must estimate the fair value of the trade name. (You will learn more about intangible asset impairments in Chapter 12.) It has developed the following cash flow estimates related to the trade name based on internal information. Each cash flow estimate reflects Killroy’s estimate of annual cash flows over the next 8 years. The trade name is assumed to have no salvage value after the 8 years. (Assume the cash flows occur atthe end of each year.) Cash Flow Estimate Probability Assessment $380,000 20% 630,000 50% 750,000 30% Instructions(a) What is the estimated fair value of the trade name? Killroy determines that the appropriate discount rate for this estimation is 8%.(b) Is the estimate developed for…Arca Salvage purchased equipment for $10,000. Arca recorded total depreciation of $8,000 on the equipment. Assume that Arca exchanged the old equipment for new equipment, paying $4,000 cash. The fair market value of the new equipment is $5,000. Journalize Arca's exchange of equipment. Assume this exchange has commercial substance. Let's begin by calculating the gain or loss on the exchange of equipment. (Enter a loss with a minus sign or parentheses.) Market value of assets received Less: Book value of asset exchanged Cash paid Gain or (Loss)In 1980, Artima Corporation purchased an office building for $400,000 for use in its business. The building is sold during the current year for $550,000. Total depreciation allowed for the building was $390,000; straight-line would have been $360,000. As result of the sale, how much Sec. 1231 gain will Artima Corporation report? O A. $150,000 B. $510,000 C. $398,000 D. $540,000
- 2. Soft Oil Company has an ORI in an unproved property for which it paid $80,000. The ORI has not been impaired. Soft sells 60% of the ORI for a cash consideration of $106,000. The amount of the credit for the Gain on the sale of ORI entry will be ?ABC Company acquired a property for speculation purposes with the intention of selling it at a higher price in the long-term. The property was acquired at a cash price of P3,000,000. The property has P100,000 unpaid real property tax assumed by ABC Company. In addition, the company also paid the following transaction costs: broker's commission of P20,000 and registration cost of P35,000. How much ABC should record as Investment Property?Bateman Corporation sold an office building that it used in its business for $800,850. Bateman bought the building ten years ago for $599,575 and has claimed $201,275 of depreciation expense. What is the amount and character of Bateman's gain or loss?