MCQ Turner Enterprises owns a facility where it acquired a piece ofequipment for $25,000. Over time, the company claimed $9,000in depreciation. In the current year, Turner sells the asset for$32,000.What is the amount and nature of the gain/loss from the sale?a. $7,000 of ordinary income, $9,000 long term capital gainb. $9,000 of ordinary income, $7,000 long term capital gain.c. $16,000 ordinary incomed. $16,000 long term capital gain

Explanation of Book Value: Book value represents the carrying amount of an asset on a company's…

Answered: Turner Enterprises owns a facility…

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter14: Property Transactions: Capital Gains And Losses, § 1231, And Recapture Provisions

Section: Chapter Questions

Problem 32CE

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Bliss Company owns an asset with an estimated life of 15 years and an estimated residual value of zero. Bliss uses the straight -line method of depreciation. At the beginning of the sixth year, the assets book value is 200,000 and Bliss changes the estimate of the assets life to 25 years, so that 20 years now remain in the assets life. Explain how this change will be accounted for in Blisss financial statements, and compute the current and future annual depreciation expense.
The following intangible assets were purchased by Hanna Unlimited: A. A patent with a remaining legal life of twelve years is bought, and Hanna expects to be able to use it for six years. It is purchased at a cost of $48,000. B. A copyright with a remaining life of thirty years is purchased, and Hanna expects to be able to use it for ten years. It is purchased for $70,000. Determine the annual amortization amount for each intangible asset.
Garcia Co. owns equipment that costs $150,000, with accumulated depreciation of $65,000. Garcia sells the equipment for cash. Record the journal entry for the sale of the equipment if Garcia were to sell the equipment for the following amounts: A. $90,000 cash B. $85,000 cash C. $80,000 cash
CCC Manufacturing Inc. sold equipment that it uses in its business for $110,000. CCC bought the equipment two years ago for $95,000 and has claimed $10,000 of depreciation expense. What is the amount and character of CCC's gain or loss? $25,000 ordinary gain. $25,000 capital gain. $10,000 ordinary gain and $15,000 §1231 gain. $15,000 ordinary gain and $10,000 §1231 gain.
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Joe's Restaurant Inc. purchased an oven for $10,000 and takes $9,000 of depreciation on that oven over three years. Under IRC §1011 the basis of the oven is $1,000. A sells the oven for $20,000 thereby realizing a gain of $19,000. How much of the gain is recaptured as ordinary income, and how much is treated as §1231 gain . a. 9,000 recaptured as ordinary income 10,000 treated as §1231 gain b. 10,000 recaptured as ordinary income 9,000 treated as §1231 gain c. 19,000 recaptured as ordinary income none treated as §1231 gain d. none recaptured as ordinary income 19,000 treated as §1231 gain
In 1980, Artima Corporation purchased an office building for $400,000 for use in its business. The building is sold during the current year for $550,000. Total depreciation allowed for the building was $390,000; straight-line would have been $360,000. As result of the sale, how much Sec. 1231 gain will Artima Corporation report? O A. $150,000 B. $510,000 C. $398,000 D. $540,000
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On January 4, 1986, Rita Racksaw purchased a warehouse for $150,000. In 2020, she sold the warehouse for $107,000. She took $150,000 depreciation under ACRS and straight-line depreciation would have been $150,000. How much and what type of income or gain would Rita have on the sale? $43,000 Section 1231 loss $107,000 Section 1231 gain $107,000 long-term capital gain $107,000 ordinary income
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Rock Properties recently purchased a building that generates Gross Rental Income of $190,000 per year and Net Operating Income of $125,000 per year. Rock paid $250 per square foot for the 3,000 square foot building. What was the capitalization rate based on the purchase price? a. 25.3% b. 65.8% c. 16.7% d. 12.5% e. None of the above.

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