Required informationProblem 11-51 (LO 11-5)The following information applies to the questions displayed below.]Bourne Guitars, a corporation, reported a $157,000 net $1231 gain for year 6.Problem 11-51 Part-aa. Assuming Bourne reported $50,000 of nonrecaptured net §1231 losses during years 1-5, what amount ofBourne's net 81231 gain for year 6, if any, is treated as ordinary income?Bourne's gain treated as ordinary income

a.Calculate Bourne’s net §1231 gain:

Answered: Required information Problem 11-51 (LO…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Problem 08-48 (Algo) [LO 8-1, 8-7, 8-8] Ms. Drake sold a business that she had operated as a sole proprietorship for 18 years. On the date of sale, the business balance sheet showed the following assets: Accounts receivable Inventory Furniture and equipment: Cost Accumulated depreciation Leasehold improvements: Cost Accumulated amortization Tax Basis $ 37,750 143,200 Net cash flow 50,750 (40,600) 22,000 (4,400) Required: The purchaser paid a lump-sum price of $316,000 cash for the business. The sales contract stipulates that the FMV of the business Inventory is $156,400, and the FMV of the remaining balance sheet assets equals adjusted tax basis. Assuming that Ms. Drake's marginal tax rate on ordinary income is 35 percent and her rate on capital gain is 15 percent, compute the net cash flow from the sale of her business.
Required Information Problem 09-59 (LO 09-4) (Algo) [The following information applies to the questions displayed below.] Georgio owns a 10 percent profits and capital interest in Rain Tree LLC. For the current year, Rain Tree had the following revenues, expenses, gains, and losses: Sales revenue Gain on sale of land (51231) Cost of goods sold Depreciation-MACRS §179 deduction* Employee wages Nondeductible fines and penalties Municipal bond interest Short-term capital gains Guaranteed payment to Sandra $ 85,000 13,600 (46,750) (4,250) (14,500) (20,000) (3,800) 7,300 6,150 (3,700) *Assume the $179 property placed in service limitation does not apply. Problem 09-59 Part b (Algo) b. What are Georgio's separately stated items for the year? Description Separately Stated Items on Schedule K-1: Total Amount Allocated to Georgio
Chapter 7 Homework Help Save & Exit Submit Saved TGW, a calendar year corporation, reported $4,016,000 net income before tax on its financial statements prepared in accordance with GAAP. The corporation's records reveal the following information: • TGW's depreciation expense per books was $457,000, and its MACRS depreciation deduction was $382,400. • TGW capitalized $687,000 indirect expenses to manufactured inventory for book purposes and $820,000 indirect expenses to manufactured inventory for tax purposes. • TGW's cost of manufactured goods sold was $2,566,000 for book purposes and $2,656,000 for tax purposes. • Four years ago, TGW capitalized $2,304,000 goodwill when it purchased a competitor's business. This year, TGW's auditors required the corporation to write the goodwill down to $1,545,000 and record a $759,000 goodwill impairment expense. 2 points eBook Required: Compute TGW's taxable income. (Do not round intermediate calculations. Amounts to be deducted should be indicated…
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Exercise 16-5 (Algo) Taxable income given; calculate deferred tax liability from book-tax difference; 100% depreciation in the year of purchase; financial statement effects [LO16-2] Ayres Services acquired an asset for $80 million in 2024. The asset is depreciated for financial reporting purposes over four years on a straight-line basis (no residual value). Ayers deducted 100% of the asset's cost for income tax reporting in 2024. The enacted tax rate is 25%. Amounts for pretax accounting income, depreciation, and taxable income in 2024, 2025, 2026, and 2027 are as follows: 2024 ($ in millions) 2025 2026 2027 Pretax accounting income $ 370 $ 390 Depreciation on the income statement 20 20 $ 405 20 Depreciation on the tax return (80) (0) (0) $ 440 20 (8) $ 310 $ 410 $ 425 $ 460 Taxable income Required: For December 31 of each year, determine (a) the cumulative temporary book-tex difference for the depreciable asset and (b) the balance to be reported in the deferred tax liability account.…
Required Information Problem 09-59 (LO 09-4) (Algo) [The following information applies to the questions displayed below.] Georgio owns a 10 percent profits and capital interest in Rain Tree LLC. For the current year, Rain Tree had the following revenues, expenses, gains, and losses: Sales revenue Gain on sale of land ($1231) Cost of goods sold Depreciation-MACRS §179 deduction* Employee wages Nondeductible fines and penalties Municipal bond interest Short-term capital gains. Guaranteed payment to Sandra *Assume the §179 property placed in service limitation does not apply. Description Problem 09-59 Part a (Algo) a. How much ordinary business income (loss) is allocated to Georgio for the year? Sales revenue Ordinary Business Income $ 85,000 13,600 (46,750) (4,250) (14,500) Total Amount Allocated to Georgio (20,000) (3,800) 7,300 6,150 (3,700)
Problem 3-16 (Algorithmic) (LO. 1, 4) Prance, Inc., earned pretax book net income of $1,677,000 in 2020. Prance acquired a depreciable asset in 2020, and first-year tax depreciation exceeded book depreciation by $167,700. In 2021, Prance reports $1,173,900 of pretax book net income, and the book depreciation exceeds tax depreciation that year by $41,925. Prance reports no other temporary or permanent book-tax differences. Assume the pertinent U.S. Federal corporate income tax rate is 21% and Prance earned an after-tax rate of return on capital of 8%. Enter below the 2021 Prance's deferred tax expense and any deferred tax asset or liability. If an amount is zero, enter "0". If required, round your answer to nearest whole value. Deferred tax asset account balance Deferred tax liability account balance a. b. 0 Feedback -26,413 c. In net present value terms, what has been the value to Prance of accelerating $41,925 of 2021 book depreciation to 2020? The present value factor at 8% is…
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