QUESTION 11 Acom Construction (calendar-year end C-corporation) has had rapid expansion during the last half of the current year due to the housing market's recovery. The company has $5,000,000 of taxable income before the cost recovery deduction and would like to maximize its cost recovery deduction for the current year. Acom provided the following information Assets New Equipment and Tools Used Light Duty Trucks Used Machinery Total Placed in Service August 20 October 17 November 6 Basis $3,650,000 2,500,000 525.000 $6,675,000 The used assets had been contributed to the business by its owner in a nontaxable transaction. What is Acom's maximum cost recovery expense in the current year?

QUESTION 11 Acom Construction (calendar-year end C-corporation) has had rapid expansion during the last half of the current year due to the housing market's recovery. The company has $5,000,000 of taxable income before the cost recovery deduction and would like to maximize its cost recovery deduction for the current year. Acom provided the following information Assets New Equipment and Tools Used Light Duty Trucks Used Machinery Total Placed in Service August 20 October 17 November 6 Basis $3,650,000 2,500,000 525.000 $6,675,000 The used assets had been contributed to the business by its owner in a nontaxable transaction. What is Acom's maximum cost recovery expense in the current year?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Pls show solution and answer
Question 5
QUESTION 1 Blaze Scooters is considering expanding into a new college town and has the following operating data: Initial Investment in scooters (year 0): $101515 Cost of securing permits (assume that permit cost is a tax-deductible expense in year 1): $7430 Anticipated Revenue: $236449 for years 1-5. Depreciation of scooters - straight line down to 0 over 5 years. Operating expenses (not including Depreciation): $78101 per year. Tax Rate: 21%. Net Working Capital, consisting of cash, spare parts inventory, accounts receivable, and accounts payable: $30,000. Blaze expects to be able to recoup 100% of Net Working if they shut down. Assume that investment in working capital occurs in year 0 at the start of the project. Scrap value of scooters at the end of 5 years: $20,000. (remember that any capital gains when selling are taxable) Assume that Blaze makes the necessary investments, operates for 5 years, and then shuts down, selling the scooters for scrap and recouping Net Working Capital.…
MACRS Year 0 Depreciation Rate 33.33% $55,998 $79,608 $57,962 A machine is purchased for $850,000 and is used through the end of Year 2. The machine will be depreciated using the 3-Year MACRS schedule in the table above. At the end of Year 2, the machine is sold for $75,000. What is the after-tax cash flow from the sale of the machine at the end of Year 2 if the firm's marginal tax rate is 35%? $62,985 $75,000 Project Year Year 1 44.45% $70,795 Year 2 14.81% Year 3 7.41%
None
vnt.5
None
Exercise 7-10A Determine depreciation for the first year under three methods (LO7-4) [The following information applies to the questions displayed below.] Super Saver Groceries purchased store equipment for $38,500. Super Saver estimates that at the end of its 10-year service life, the equipment will be worth $2,500. During the 10-year period, the company expects to use the equipment for a total of 12,000 hours. Super Saver used the equipment for 1,620 hours the first year. Required: Calculate depreciation expense of the equipment for the first year, using each of the following methods. (Do not round your intermediate calculations.) Exercise 7-1OA Part 2 2. Double-declining-balance. Depreciation expense e to search ASUS
Problem 4.a: A hydraulic crane service company had sales revenue of $2,250,000 from operations during tax-year 1. The following table provides other financial information relating to the tax year: Labor expenses Materials costs Depreciation expenses Interest expenses Rental expenses Proceeds from sale of old equipment with a book value of $20,000 How much is the taxable income? $550,000 $385,000 $132,500 $22,200 $45,000 $23,000
9. Long Term Assets: Hard #11
Revenue Recognition at a Point in Time versus Revenue Recognition Over Time The Markert Company won a contract to build a shopping center at a price of $300 million. The following schedule details the estimated and actual costs of construction and the actual cash collections under the contract: Estimated (Actual) Costs Cash Collections of Construction From Customer Year 1 $40,000,000 Year 2 60,000,000 Year 3 70,000,000 Year 4 30,000,000 $200,000,000 Required 1. Prepare an income statement for the Markert Company for each year assuming that the company recognizes revenue at a point in time. Year 1Year 2Year 3 Year 4Total Revenues $60,000,000 75,000,000 75,000,000 90,000,000 $300,000,000 Less: Expenses Net Income
PROBLEM 8-3. ANTICIPATED LOSS Andrei Construction Company began operations on January 1, 2019. During the year, Andrei entered into a contract with Lindsey Company to construct a manufacturing facility. At that time, Andrei estimated that it would take 3 to complete the facility at a total cost of P4,500,000. The total contract price is P6,300,000. estimated that P4,204,200 more will be needed for its completion. Lindsey Company was billed and paid 30% of the contract price. years In 2019, Andrei incurred P1,185,800 in construction costs and The following year, Andrei Construction Company incurred P3,299,200 and the engineer's estimate of cost to complete is P2,500,000. It is expected that the project will be completed this year. Required: Compute the amount to be reported as Contract Revenue, Contract Costs and Profit to appear in the income statement for the years 2019 and 2020.