On Dec 31, 2019, Benson sold a used backhoe for 1 million cash. The original of backhoe was 5 million and its accumulated depreciation equaled $4.2 million on Dec 31, 2019. What is the gain or loss from Dec 32 equipment sale? A. $200,000 gain B. $600,000 loss C.$200,000 loss D.$600,000 gain

On Dec 31, 2019, Benson sold a used backhoe for 1 million cash. The original of backhoe was 5 million and its accumulated depreciation equaled $4.2 million on Dec 31, 2019. What is the gain or loss from Dec 32 equipment sale? A. $200,000 gain B. $600,000 loss C.$200,000 loss D.$600,000 gain

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter11: Property Dispositions

Section: Chapter Questions

Problem 64P

See similar textbooks

Similar questions

In 2019, Mary sells for $24,000 a machine used in her business. The machine was purchased on May 1,2017, at a cost of $22,000. Mary has deducted depreciation on the machine of $6,000. What is the amount and nature of Mary's gain as a result of the sale of the machine? $2,000 Section 1231 gain $8,000 ordinary income under Section 1245 $6,000 ordinary income and $2,000 Section 1231 gain $6,000 Section 1231 gain and $2,000 ordinary income under Section 1245 None of the above
Vorst depreciates Asset C by the straight-line method. On June 30, 2020, Vorst sold Asset C for 28,000 cash. How much gain (loss) should Vorst record in 2020 on the disposal of Asset C? a. 2,800 b. (2,800) c. (5,600) d. (8,400)
Chapman Inc. purchased a piece of equipment in 2018. Chapman depreciated the equipment on a straight-line basis over a useful life of 10 years and used a residual value of $12,000. Chapmans depreciation expense for 2019 was $11,000. What was the original cost of the building? a. $98,000 b. $110,000 c. $122,000 d. $134,000
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?
Assets Acquired by Exchange Bremer Company made the following exchanges of assets during 2019: 1. Acquired a more advanced machine worth 10,000 by paying 2,000 cash and giving up a machine that had originally cost 40,000 and has a book value of 12,000, 2. Acquired a building worth 55,000 by paying 5,000 cash and giving up a piece of land that had originally cost 35,000. 3. Acquired a more advanced machine worth 20,000 by paying 5,000 cash and giving up a machine that had originally cost 13,000 and has a book value of 11,000. 4. Acquired a car by giving up a truck that had originally cost 20,000, has a book value of 15,000, and has a blue book value of 16,800. In addition, the company received 1,000 cash. Required: Prepare Bremers journal entry for each exchange. Assume all exchanges were determined to have commercial substance.
Depreciation Methods On January 1, 2019, Loeffler Company acquired a machine at a cost of $200,000. Loeffler estimates that it will use the machine for 4 years or 8,000 machine hours. It estimates that after 4 years the machine can be sold for $20,000. Loeffler uses the machine for 2,100 and 1,800 machine hours in 2019 and 2020, respectively. Required: Compute depreciation expense for 2019 and 2020 using the (1) straight-line, (2) double-declining-balance, and (3) units-of-production methods of depreciation.
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.
Effect of depreciation on net income Einstein Construction Co. specializes in building replicas of historic houses. Bree Andrus. president of Einstein Construction, is considering the purchase of various items of equipment on July 1. 20Y2. for $300,000. The equipment would have a useful life of five years and no residual value. In the past, all equipment has been leased. For tax purposes, Bee is considenng depreciating the equipment by the straight-line method. She discussed the matter with her CPA and learned that although the straight-line method could be elected, it was to her advantage to use the Modified Accelerated Cost Recovery System (MACRS) for tax purposes. She asked for your advice as to which method to use for tax purposes. What factors would you present for Bree’s consideration in the selection of a depreciation method?
Sony Company has decided to sell one of its old machines on December 31, 2019. The machine was purchased for $88,000, and the accumulated depreciation was $ 68,000. If the machine was sold for $17,000, what was the anmount of the gain or loss recorded at the time of the sale? Select one: a. $16,000. b. $17,000 C. $68,000 d. $3,000
Swifty Company purchased machinery for $939000 on January 1, 2019. Accumulated Depreciation was $846000 on December 31, 2025. The machinery was sold on January 1, 2026 for $70000. What gain or loss did Swifty record from the sale of the machinery? O $70000 loss O $23000 gain O $70000 gain O $23000 loss
On January 1, 2014, Tanaka, Inc. purchased equipment for $27,000. Tanaka uses straight-line depreciation and estimates a 10-year useful life and a $3,000 salvage value. On December 31, 2021, Tanaka sells the equipment for $14,200. In recording this sale, Tanaka should reflect: Select one: a. A $1,400 gain b. A $1,600 gain c. A $3,000 gain d. A $6,400 gain e. None of the above
Sony Company has decided to sell one of its old machines on December 31, 2019. The machine was purchased for $88,000, and the accumulated depreciation was $ 68,000. If the machine was sold for $17,000, what was the amount of the gain or loss recorded at the time of the sale? nestion Select one: a. The answer does not exist b. $3,000 C. $68,000 d. $16,000. Tim e. $17,000 Previous page Next page OSHIBA FI F2 F3 F4 F5 F6 F7 F8 F9 F10 F11 PRTSC SYSRQ F12 HOM PAUS -因 * 2 5 HOME 8 PGUP 9. Y ! P 4 F G y H i K END 1 PGDN V N i INS DEL ALT ALT * 19 E