FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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1.
George, a cash basis taxpayer, sells equipment for $200,000. The equipment originally cost
$70,000 and George deducted $10,000 of tax
A. Gross profit on the sale is .
B. The contract price is _.
C. The gross profit percentage is _.
D. Income and the character of such to be reported in the year of sale is_
.
E. Income and the character of such to be reported in each subsequent year is
.
F. Assuming George recognizes the gain on the sale under the cost recovery method for book purposes, the amount of the Schedule M-1 item for the year of the sale is
__________________________________________________________ [favorable] [unfavorable]
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