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Required information [The following information applies to the questions displayed below.] Tempe Corporation is a calendar-year corporation. At the beginning of 2022, its election to be taxed as an S corporation became effective. Tempe Corporation's balance sheet at the end of 2021 reflected the following assets (it did not have any earnings and profits from its prior years as a C corporation): Cash Asset Accounts receivable Inventory Land Totals Adjusted Basis $ 26,000 43,600 FMV $ 26,000 43,600 236,000 184,000 174,000 132,000 $ 427,600 $ 437,600 Tempe Corporation's business income for the year was $46,000 (this would have been its taxable income if it were a C corporation). During 2022, Tempe Corporation sold all of the inventory it owned at the beginning of the year for $258,000. a. What is its built-in gains tax in 2022? Built-in gains tax

Required information [The following information applies to the questions displayed below.] Tempe Corporation is a calendar-year corporation. At the beginning of 2022, its election to be taxed as an S corporation became effective. Tempe Corporation's balance sheet at the end of 2021 reflected the following assets (it did not have any earnings and profits from its prior years as a C corporation): Cash Asset Accounts receivable Inventory Land Totals Adjusted Basis $ 26,000 43,600 FMV $ 26,000 43,600 236,000 184,000 174,000 132,000 $ 427,600 $ 437,600 Tempe Corporation's business income for the year was $46,000 (this would have been its taxable income if it were a C corporation). During 2022, Tempe Corporation sold all of the inventory it owned at the beginning of the year for $258,000. a. What is its built-in gains tax in 2022? Built-in gains tax

FINANCIAL ACCOUNTING
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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Required information [The following information applies to the questions displayed below.] Tempe Corporation is a calendar-year corporation. At the beginning of 2022, its election to be taxed as an S corporation became effective. Tempe Corporation's balance sheet at the end of 2021 reflected the following assets (it did not have any earnings and profits from its prior years as a C corporation): Cash Asset Accounts receivable Inventory Land Totals Adjusted Basis $ 26,000 43,600 FMV $ 26,000 43,600 236,000 184,000 174,000 132,000 $ 427,600 $ 437,600 Tempe Corporation's business income for the year was $46,000 (this would have been its taxable income if it were a C corporation). During 2022, Tempe Corporation sold all of the inventory it owned at the beginning of the year for $258,000. a. What is its built-in gains tax in 2022? Built-in gains tax
Transcribed Image Text:Required information [The following information applies to the questions displayed below.] Tempe Corporation is a calendar-year corporation. At the beginning of 2022, its election to be taxed as an S corporation became effective. Tempe Corporation's balance sheet at the end of 2021 reflected the following assets (it did not have any earnings and profits from its prior years as a C corporation): Cash Asset Accounts receivable Inventory Land Totals Adjusted Basis $ 26,000 43,600 FMV $ 26,000 43,600 236,000 184,000 174,000 132,000 $ 427,600 $ 437,600 Tempe Corporation's business income for the year was $46,000 (this would have been its taxable income if it were a C corporation). During 2022, Tempe Corporation sold all of the inventory it owned at the beginning of the year for $258,000. a. What is its built-in gains tax in 2022? Built-in gains tax
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