nstructionsQuestion 16Which of the following statements is CORRECT?O Since depreciation is a cash expense, the faster an asset is depreciated, the lower the projected NPV from investing in the asset.O Under current laws and regulations, corporations must use straight-line depreciation for all assets whose lives are 5 years or longer.Corporations must use the same depreciation method for both stockholder reporting and tax purposes.O Using bonus depreciation rather than straight line depreciation normally has the effect of receiving depreciation cash flows immediately and thusincreasing a project's forecasted NPV.O Using bonus depreciation rather than straight line depreciation normally has the effect of delaying the receipt of depreciation cash flows and thusreducing a project's forecasted NPV.« PreviousNextNot savedSubmit Quiz80000000escDDF1F2F3F4F 5F6F7FO%23$4%&2345678QWАSDGKBMI

Depreciation is the process of tying the expense of utilizing a tangible item to the benefit earned…

Answered: Question 16 Which of the following…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Exercise 19-26 (Algorithmic) (LO. 4, 10) Rover Corporation would like to transfer excess cash to its sole shareholder, Aleshia, who is also an employee. Aleshia is in the 24% tax bracket, and Rover is subject to a 21% rate. Because Aleshia's contribution to the business is substantial, Rover believes that a $94,800 bonus in the current year is reasonable compensation and should be deductible by the corporation. However, Rover is considering paying Aleshia a $94,800 dividend because the tax rate on dividends is lower than the tax rate on compensation. Answer the following questions to determine whether Rover is correct in believing that a dividend is the better choice. a. Regarding taxes, which would benefit Aleshia the most? The $94,800 dividend from the bonus. because after taxes she would have $ 80,580 from the dividend and 72,048 b. Regarding taxes, which would benefit Rover Corporation the most? The $25,000 bonus because it would save Rover 5,250 in taxes. c. Considering the two…
Question 13 of 75 A taxpaver has some income leftover between their California AGI and their deductions - Will this amount impact the size of any capital loss carryover into future years? O No - Capital losses are unmodified until they are deducted entirely. O No - So long as the capital loss is deducted within the fifteen (15) years that is allowed, the rest of the return doesn't impact it Yes - The capital gains carryover amounts use the state AGI and deduction figures to lessen the amount of the available capital loss carryforward into future years. O No - The capital losses do not even impact the return, carrying over in full to only offset future gains. Next
Income Tax. Deferred Tax Liability and Deferred Tax Asset (PAS 12) Problem 11. The 2015 income statement of Rob Inc. reported a financial income of P3,000,000. The tax accountant and tax auditor have found the following items included in such amount: Capital gain from the sale of a land classified as capital asset Illegal contribution to political parties and candidates Interest income from a 6-year time deposit Representation expenses in excess of the amount allowed by NIRC 400,000 P300,000 200,000 500,000 Based on the analysis conducted by the accountant and tax auditor, they also found out the following differences in tax and accounting treatments: • Unearned revenue of P200,000 was recorded by Rob Inc. in its accounting books but was reported as income in the corporate income tax return. • Installment sales of P300,000 was recorded by Rob Inc. in its accounting books but was only collected on year 2016. • Provision for lawsuit for P400,000 was recognized by Rob Inc. in its…
QUESTION 33 Peacock Corporation sold equipment during the current year. Its tax gain on the equipment was $4,000 and its book gain on the equipment was $2,000. Peacock will enter $2,000 as a subtraction on Schedule M-1 of Form 1120. Oa. True. Ob. False. QUESTION 34 Which of the following items is an addition on Schedule M-17 Oa. Tax depreciation in excess of book depreciation. Ob. Proceeds of life insurance paid on death of key employee. Oc. Excess of capital losses over capital gains. Od. Tax-exempt interest. O e. None of the above.
5 C G H M Assume that Bonhomme's pretax accounting income in 2023 is $72,000. There is no difference between Bonhomme's reported accounting and tax 2 depreciation expense in 2023. Bonhomme sells more lawnmowers in 2023 with estimated warranty costs of $38,000. Actual warranty costs incurred in 2023 are $26,000. Bonhomme's investment in tax-free municipal bonds earns only $22,000. 4 7 N 19 1. Style: Prepare the journal entry necessary to record income taxes at the end of 2023. N
9. Problems and Applications Q4 When someone owns an asset (such as a share of stock) that rises in value, he has an "accrued" capital gain. If he sells the asset, he "realizes" the gains that have previously accrued. Under the U.S. income tax, realized capital gains are taxed, but accrued gains are not. When capital gains taxes are lowered, the investor has a incentive to sell the investment. Cuts in capital gains tax rates can raise tax revenue if the lower tax rate the volume of trade transactions by a large enough margin.
15 Under physical capital maintenance assumption, a profit is earned only if the physical operating capability of the entity at the end of the accounting period is _____________ its physical operating capability at the start of the period, after adjusting for any amounts contributed by or distributed to owners during the period. a. Equal to b. Less than c. None of the given options d. Greater than
n 20X6, CICO has unrecognized tax losses of $500, 000. In 20X7, the company has additional losses of $100, 000. However, the assessment is that $250, 000 of losses will probably be realized in the future. The current tax rate is 30% and the enacted rate of 20X8 is 28%. What is the entry required in 20X7. Multiple Choice a) Dr. Deferred tax asset $30, 000; Cr. Income tax expense (recovery) $30, 000 b) Dr. Deferred tax asset $70, 000; Cr. Income tax expense (recovery) $70, 000 c) Dr. Deferred tax asset $77, 000; Cr. Income tax expense (recovery) $77, 000 d) Dr. Deferred tax asset $70, 000; Cr. Retained earnings $70, 000
Identy the type(s) of gain or loss that would be recognized on the following asset sales as capital, Section 1231, Ordinary, Section 1245 recapture, Section 291 recapture, or Section 125 unrecaptred gain. a. gain on the sale of stock by an individual ________________ b. gain on the sale of a building used for 15 years by a corporation_____________ c. gain on the sale of a machine used by a business for four years sold at a price less that its original cost____________________ d. gain on the sales of inventory______________________ e. loss on the sale of equipmment used in a business for three years_________ f. gain on the sale of a machine used by a business for 11 months__________ g. Loss on th factoring of receivables______________ h. gain on sales of a building used by a sole proprietorship for eight years in excess of its original cost._______________________
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Question 34

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