Table 1, Table 2, and Exhibit 10-10.) Placed in Asset Service Basis November Used copier $ 7,800 12 New computer equipment Furniture June 6 14,000 July 15 New delivery truck October 28 January 31 32,000 19,000 70,000 $142,800 Luxury auto Total Burbank acquired the copier in a tax-deferred transaction when the shareholder contributed the copier to the business in exchange for stock. (Round your answer to the nearest whole dollar amount.) a. Assuming no bonus or §179 expense, what is Burbank's maximum cost recovery deduction for this year?

Table 1, Table 2, and Exhibit 10-10.) Placed in Asset Service Basis November Used copier $ 7,800 12 New computer equipment Furniture June 6 14,000 July 15 New delivery truck October 28 January 31 32,000 19,000 70,000 $142,800 Luxury auto Total Burbank acquired the copier in a tax-deferred transaction when the shareholder contributed the copier to the business in exchange for stock. (Round your answer to the nearest whole dollar amount.) a. Assuming no bonus or §179 expense, what is Burbank's maximum cost recovery deduction for this year?

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
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Required information. Problem 19-63 (LO 19-5) (Algo) [The following information applies to the questions displayed below] Tiffany and Carlos decided to liquidate their jointly owned corporation, Royal Oak Furniture (ROF) After liquidating its remaining inventory and paying off its remaining liabilities, ROF had the following tax accounting balance sheet Adjusted Tax Basis $ 205,500 14,500 205,000 $425,000 Cash Building Land Total FMV $ 205,500 66,500 139,000 $ 411,000 Appreciation (Depreciation) Gain or loss recognized 52,000 (66,000) $ (14,000) Under the terms of the agreement, Tiffany will receive the $205,500 cash in exchange for her 50 percent interest in ROF Tiffany's tax basis in her ROF stock is $55,000. Carlos will receive the building and land in exchange for his 50 percent interest in ROF His tax basis in the ROF stock is $103,000 Assume for purposes of this problem that the cash available to distribute to the shareholders has been reduced by any tax paid by the corporation…
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)
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Shauna and Danielle decided to liquidate their jointly owned corporation, Woodward Fashions Incorporated (WFI). After liquidating its remaining inventory and paying off its remaining liabilities, WFI had the following tax accounting balance sheet: Adjusted FMV Таx Basis Appreciation $ 165,000 33,000 $ 165,000 16,500 Cash Building 16,500 132,000 66,000 $ 247,500 Land 66,000 $ 330,000 $ 82,500 Total Under the terms of the agreement, Shauna will receive the $165,000 cash in exchange for her 50 percent interest in WFI. Shauna's tax basis in her WFI stock is $41,250. Danielle will receive the building and land in exchange for her 50 percent interest in WFI. Danielle's tax basis in her WFI stock is $82,500. Assume for purposes of this problem that the cash available to distribute to the shareholders has been reduced by any tax paid by the corporation on gain recognized as a result of the liquidation. (Negative amounts should be indicated by a minus sign.) c. What amount of gain or loss does…
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