On November 4 ,2009, blue company acquired an asset solution this question 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.
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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
ABC Compant purchased an investment property on July 1, 2016 for P4,200,000. The property had a useful life of 35 years and on December 31, 2021 had a fair valye of P3,000,000. On December 31, 2021, the property was sold for net proceeds of P3,100,000. The entity used the cost model to account for the investment property. How much is the gain (loss) to be recognized for the year ended December 31, 2021 regarding the disposal of the property. a. (540,000) b. 440,000 c. (100,000) d. (440,000)
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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?
Maxine Corporation purchased an investment property on January 1, 2017 for a cost of $2,200,000. The property had a useful life of 40 years and at December 31, 2019 had fair value of $3,000,000. On January 1, 2020 the property was sold for net proceeds of $2,900,000. Maxine Corporation uses the cost model to account for the investment property. How much is the gain (loss) on disposal of property to be recognized for the year ended December 31, 2020?
On January 1, 2013, Ameen Company purchased a building for $36 million. Ameen uses straight-line depreciationfor financial statement reporting and MACRS for income tax reporting. At December 31, 2017, the book valueof the building was $30 million and its tax basis was $20 million. At December 31, 2018, the book value of thebuilding was $28 million and its tax basis was $13 million. There were no other temporary differences and nopermanent differences. Pretax accounting income for 2018 was $45 million.Required:1. Prepare the appropriate journal entry to record Ameen’s 2018 income taxes. Assume an income tax rate of40%.2. What is Ameen’s 2018 net income?

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