During the current year, USACO (a domestic corporation) sold equipment to FrenchCo, a non-U.S. corporation, for $350,000 with title passing to the buyer in France. USACO purchased the equipment several years ago for $100,000 and took $80,000 of depreciation deductions on the equipment, all of which were allocated to U.S.-source income. USACO's adjusted basis in the equipment is $20,000 on the date of sale. What is the sourcing of the $330,000 gain on the sale of this equipment? a. $250,000 foreign source and $80,000 U.S. source. b. $250,000 U.S. source and $80,000 foreign source. c. $330,000 foreign source. d. $330,000 U.S. source.

Suppose that fabulous had purchased trucks for $400,000 which were used solely in the transportation of inventory purchased in different parts of the united states to U.S. customers. all transportation expenses, including depreciation deductions of $200,000 in respect of the trucks, were applied to reduce U.S.-source income. Fabulous then resells the used trucks for $410,000, thereby realizing income of $210,000, to a foreign purchaser that took title to the trucks in Peru. What is the source of the income realized on the sale of the trucks?

Sullivan's Island Company began operating a subsidiary in a foreign country on January 1, 2020, by investing capital in the amount of 68,000 pounds. The subsidiary immediately borrowed 160,000 pounds on a five-year note with 8 percent interest payable annually beginning on January 1, 2021. The subsidiary then purchased for 228,000 pounds a building that had a 10-year expected life and no salvage value and is to be depreciated using the straight-line method. Also on January 1, 2020, the subsidiary rented the building for three years to a group of local attorneys for 8,200 pounds per month. By year-end, rent payments totaling 82,000 pounds had been received, and 16,400 pounds was in accounts receivable. On October 1, 2020, 2,800 pounds was paid for a repair made to the building. The subsidiary transferred a cash dividend of 11,900 pounds back to Sullivan's Island Company on December 31, 2020. The functional currency for the subsidiary is the pound. Currency exchange rates for 1 pound…

Bomarks acquires an equipment from a foreign supplier on credit for $6 million on 31 March 2022, when the exchange rate was $1 = GH¢ 5. The entity incurred other direct costs of GH¢1.5 million in installing the equipment. The estimated useful life of the equipment is 10 years and the entity has obligation to restore the location to its original state after usage. The estimated cost of dismantling and restoration in 10 years is GH¢3.5 million and the entity’s cost of capital is 8%. Although the equipment was available for use from 1 May 2022, the entity did not bring it into use until 1 July, 2022. Bomarks also sold goods to a foreign customer for $3.5 million on 30 April 2022, when the exchange rate was $1 = GH¢5.75. The customer paid $1 million on 1 July when the rates were $1 = GH¢5.60. On that date, Bomarks paid half of the amount owed for the equipment. At the entity’s year-end of 31 December 2022, the closing exchange rate was $1 = GH¢5.9. The entity’s functional currency is the…

Sullivan's Island Company began operating a subsidiary in a foreign country on January 1, 2024, by Investing capital in the amount of 73,000 pounds. The subsidiary immediately borrowed 139,000 pounds on a five-year note with 10 percent interest payable annually beginning on January 1, 2025. The subsidiary then purchased for 212,000 pounds a building that had a 10-year expected life and no salvage value and is to be depreciated using the straight-line method. Also on January 1, 2024, the subsidiary rented the building for three years to a group of local attorneys for 7,000 pounds per month. By year-end, rent payments totaling 70,000 pounds had been received, and 14,000 pounds was in accounts receivable. On October 1, 2024, 4,700 pounds was paid for a repair made to the building. The subsidiary transferred a cash dividend of 12,900 pounds back to Sullivan's Island Company on December 31, 2024. The functional currency for the subsidiary is the pound. Currency exchange rates for 1 pound…

Hauswirth Corporation sold (or exchanged) a warehouse in year 0. Hauswirth bought the warehouse several years ago for $72.500. and it has claimed $24,800 of depreciation expense against the building. Required: a. Assuming that Houswirth receives $59,700 in cash for the warehouse, compute the amount and character of Hauswirth's recognized gain or loss on the sale. b. Assuming that Hauswirth exchanges the warehouse in a like-kind exchange for some land with a fair market value of $59,700 compute Houswirth's realized gain or loss, recognized gain or loss, deferred gain or loss, and basis in the new land. c. Assuming that Houswirth receives $26.500 in cash in year 0 and a $57,000 note receivable that is payable in year 1, compute the amount and character of Hauswirth's gain or loss in year 0 and in year 1. Complete this question by entering your answers in the tabs below. Required a Required b Required c Assuming that Hauswirth receives $59,700 in cash for the warehouse, compute the amount…

Corning Industries owns a patent for which it paid $77,000. At the end of the current year, accumulated amortization on the patent totaled $14,000. Due to adverse economic conditions, Corning’s management determined that it should assess whether an impairment loss should be recognized for the patent. The estimated undiscounted future cash flows to be provided by the patent total $45,000, and the patent's fair value is $30,000. (a) What is the amount of the impairment loss, if any, on the patent at the end of the current year? (b) What is the book value of the patent after any impairment loss is recorded?

Sullivan's Island Company began operating a subsidiary in a foreign country on January 1, 2020, by investing capital in the amount of 80,000 pounds. The subsidiary immediately borrowed 190,000 pounds on a five-year note with 8 percent interest payable annually beginning on January 1, 2021. The subsidiary then purchased for 270,000 pounds a building that had a 10-year expected life and no salvage value and is to be depreciated using the straight-line method. Also on January 1, 2020, the subsidiary rented the building for three years to a group of local attorneys for 8,500 pounds per month. By year-end, rent payments totaling 85,000 pounds had been received, and 17,000 pounds was in accounts receivable. On October 1, 2020, 3,400 pounds was paid for a repair made to the building. The subsidiary transferred a cash dividend of 11,750 pounds back to Sullivan's Island Company on December 31, 2020. The functional currency for the subsidiary is the pound. Currency exchange rates for 1 pound…

The Tuvok Company exchanged an old asset with a $125,700 tax basis and a $155,000 FMV for a new asset with a $147,250 FMV. Assume that this transaction is a like-kind exchange. Write all numbers with a comma, but no dollar sign (example: 130,000). a. For the exchange to occur (and be nontaxable), how much boot (if any) does Tuvok needs to receive? b. Calculate the gain realized: Calculate the gain recognized: c. Calculate the basis of the new asset for Tuvok: d. Assume the transaction is not a like-kind exchange and is a taxable transaction. Calculate the gain realized: Calculate the gain recognized:

A company owns a patent for which it paid $75 million. At the end of 2024, it had accumulated amortization on the patent of $15 million. Due to adverse economic conditions, the company's management determined that it should assess whether an impairment loss should be recognized for the patent. The estimated undiscounted future cash flows to be provided by the patent total $40 million, and the patent's fair value at that point is $30 million. Under these circumstances, the company would repor