Principles of Taxation for Business and Investment Planning 2020 Edition
Principles of Taxation for Business and Investment Planning 2020 Edition
23rd Edition
ISBN: 9781260433210
Author: Jones, Sally
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 5, Problem 7AP

Indicate whether each of the following items is considered a primary authority or a secondary authority.

  1. a. Reg. §1.305-1(b).
  2. b. Rev. Rul. 67-225, 1967-2 C.B. 238.
  3. c. S.M. Jones, S.C. Rhoades-Catanach, and S. Callaghan, Principles of Taxation for Business and Investment Planning (New York: McGraw-Hill Education, 2017).
  4. d. PLR 201240007.
  5. e. Helvering v. Alabama Asphaltic Limestone Co., 315 U.S. 179 (1942).
  6. f. United States Tax Reporter Code Arranged Explanations 614 Gross income defined.
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Mason Manufacturing is preparing its annual profit plan. As part of its cost analysis, management estimates that $150,000 in purchasing support costs should be allocated to individual suppliers based on the number of shipments received. The company has two major suppliers: • Supplier X received 35 shipments during the year. Supplier Y received 105 shipments during the year. Compute the amount of purchasing costs allocated to Supplier Y, assuming Mason Manufacturing uses number of shipments received to allocate costs. a) $30,000 b) $45,000 c) $90,000 d) $112,500
On January 1, 2020, Superior Manufacturing Company purchased a machine for $50,000,000. Superior's management expects to use the machine for 35,000 hours over the next five years. The estimated residual value of the machine at the end of the fifth year is $60,000. The machine was used for 5,000 hours in 2020 and 6,200 hours in 2021. What is the depreciation expense for 2020 if the company uses the units of the production method of depreciation?

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