ABC Laundry uses the income tax basis of accounting, a special purpose framework to prepare its financial statement. Its assets are subject to cost recovery deductions and thus ABC Laundry uses the Modified Accelerated Cost Recovery System to compute these deductions. In its financial statements, ABC Laundry, who does not elect to omit substiantially all disclosures

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

Ma3.

ABC Laundry uses the income tax basis of accounting, a special purpose framework to prepare its financial statement. Its assets are subject to cost recovery deductions and thus ABC Laundry uses the Modified Accelerated Cost Recovery System to compute these deductions. In its financial statements, ABC Laundry, who does not elect to omit substiantially all disclosures

 

a. Must provide, in its footnotes, information disclosures about MACRS similar to those required by GAAP for depreciation.

 

b. Need not identify the special purpose frameworks that it uses.

 

c. Need only disclose the asset base, cost recovery deductions taken in the current year, and the asset base remaining after all costs recovery deductions have been taken in prior years.

Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Administration and Procedures
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education