I want to correct answer general accounting On November 4, 2009, Blue Company acquired an asset (27.5-yearresidential real property) for $200,000 for use in its business. In2009 and 2010, respectively, Blue took $642 and $5128 of costrecovery. These amounts were incorrect because Blue applied thewrong percentage (i.e. those for 39-year rather than 27.5-year).Blue should have taken $910 and $7272 cost recovery in 2009 and2010. On January 1, 2011, the asset was sold for $180000. Calculatethe gain or loss on the sale of the asset in 2011.

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Answered: On November 4, 2009, Blue Company…

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion

Section: Chapter Questions

Problem 31P

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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.
At the beginning of 2019, Conley Company purchased an asset at a cost of 10,000. For financial reporting purposes, the asset has a 4-year life with no residual value and is depreciated by the straight-line method beginning in 2019. For tax purposes, the asset is depreciated under MACRS using a 5-year recovery period. Prior to 2019, Conley had no deferred tax liability or asset. The difference between depreciation for financial reporting purposes and income tax purposes is the only temporary difference between pretax financial income and taxable income. The current income tax rate is 30%, and no change in the tax rate has been enacted for future years. In 2019 and 2020, taxable income will be higher or lower than financial income by what amount?
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On May 1, 2015, Zoe Inc. purchased Branta Corp. for $15,000,000 in cash. They only received $12,000,000 in net assets. In 2016, the market value of the goodwill obtained from Branta Corp. was valued at $4,000,000, but in 2017 it dropped to $2,000,000. Prepare the journal entry for the creation of goodwill and the entry to record any impairments to it in subsequent years.
Turnip 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.
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
In year 0, Canon purchased a machine to use in its business for $56,000. In year 3, Canon sold the machine for $42,000. Between the date of the purchase and the date of the sale, Canon depreciated the machine by $32,000. (Loss amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.) a. What are the amount and character of the gain or loss Canon will recognize on the sale, assuming that it is a partnership? Total Gain/Loss Recognized Character of Recognized Gain/Loss Ordinary Gain/Loss 1231 gain/Loss
n year 0, Canon purchased a machine to use in its business for $56,000. In year 3, Canon sold the machine for $42,000. Between the date of the purchase and the date of the sale, Canon depreciated the machine by $32,000. (Loss amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.) c. What are the amount and character of the gain or loss Canon will recognize on the sale, assuming that it is a corporation and the sale proceeds were increased to $60,000? Total Gain/Loss Recognized Character of Recognized Gain/Loss Ordinary Gain/Loss 1231 gain/loss
On 1/1/2018, ABC company purchased equipment costing $35, 000 where its useful life was 5 years and the salvage value was 55,000. ABC decided to use the straight-line method in calculating depreciation. In 2020, ABC found out that the accountant recorded wrongly $600 and 5900 for 2018 and 2019 respectively, instead of S6, 000 for each year, for depreciation. Equipment is depreciated for tax purposes using a straight-line method, with a tax rate of 40% The accounting entries in 31/12/2020 for the corrections are: Select one: a. All answers are false b. Accumulated depreciation $10,500 Cumulative effect of corrections of prior period errors $6, 300 Deferred tax Liabilities S4, 200 c. Cumulative effect of corrections of prior period errors $8, 400 Deferred tax Assets $2, 100 Accumulated depreciation $10, 500 Retained earnings S8, 400 Cumulative effect of correction of prior period error S8, 400 d. Cumulative effect of corrections of prior period errors S6, 300 Deferred tax Assets S4, 200…
n year 0, Canon purchased a machine to use in its business for $56,000. In year 3, Canon sold the machine for $42,000. Between the date of the purchase and the date of the sale, Canon depreciated the machine by $32,000. (Loss amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.) d. What are the amount and character of the gain or loss Canon will recognize on the sale, assuming that it is a corporation and the sale proceeds were decreased to $20,000?
On January 2, 2018, Orenge Corporation purchased equipment for $300,000 with an ADS recovery period of 10 years and a MACRS useful life of 7 years. Section 179 was not elected. MACRS depreciation properly claimed on the asset, including depreciation in the year of sale, totaled $79,605. The equipment was sold on July 1, 2019, for $290,000. As a result of the sale, the adjustment to taxable income needed to arrive at current E & P is: a. No adjustment is required. b. Decrease $49,605. c. Increase $49,605. d. Decrease $79,605. e. None of the above. Please explain step by step ?
On March 31, 2024, Susquehanna Insurance purchased an office building for $12, 600, 000. Based on their relative fair values, one - third of the purchase price was allocated to the land and two-thirds to the building. Furniture and fixtures were purchased separately from office equipment on the same date for $1,380, 000 and $880, 000, respectively. The company uses the straight - line method to depreciate its buildings and the double - declining - balance method to depreciate all other depreciable assets. The estimated useful lives and residual values of these assets are as follows: Service Life Residual Value Building 40 10% of cost Furniture and fixtures 20 10% of cost Office equipment 10 $ 48, 000 Required: Calculate depreciation for the years ended December 31, 2024 and 2025. What book values would be reported in the December 31, 2025, balance sheet (including land)?

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