Answered: mounts allocated to Class VI and Class…

Business

Accounting

mounts allocated to Class VI and Class VII assets will likely be amortized by the buyer over how many years:

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter8: Depreciation And Sale Of Business Property

Section: Chapter Questions

Problem 11MCQ

See similar textbooks

Related questions

Q: 5. Mark Corp. has taxable income of $10,000,000. They purchase $1,100,000 of qualified personal…

A: Section 179:-It is a US Revenue Code is an immediate business expense deduction from the assets one…

Q: Blossom Co. at the end of 2020, its first year of operations, prepared a reconciliation between…

A: Solution Given Pretax financial income =$3550000 Estimated litigation expense…

Q: The Lancer Company has a single investment property, which had original cost of P580,000 on January…

A: Under the fair value model, investment property is remeasured at the end of each reporting period.…

Q: YOPC On Januar y 1 20x1, Entity sold building to Entity Y and a simultaneously leased it back.…

A: 1)Gross investment in the lease is the sum of all minimum lease payments+ Non guaranteed residual…

Q: acquisition date, the acquirer could only determine a provisional fair value for the Plant. On March…

A: Cash 50000 Furniture & fittings 20000 Accounts receivable 5000 Plant 131000…

Q: 1. An entity acquired a building for the purpose of leasing it on Jan 1, 2021 for P50 M. At that…

A: Solution: Depreciation on building for 2021 = P50M/40 = P1.25 M

Q: 17. On December 31, 20x4, the machinery remains unsold. The fair value of the machinery on December…

A: Non-Current Assets held for sale: It is the non-current assets which a company is planned to…

Q: Good morning 5 mayo 8:51

A: Requirement 1: Purchase cost of patent on January 1,2018 = $1,000,000 Estimated life = 10 years In…

Q: 1. Carla Vista purchased a patent from Vania Co. for $1,290,000 on January 1, 2018. The patent is…

A: Any intangible assets purchased has to be amortized over the useful life of assets. If there is…

Q: 1. Sheridan purchased a patent from Vania Co. for $1,160,000 on January 1, 2018. The patent is being…

A: A patent is a privilege allowed to a designer by the government that allows the innovator to reject…

Q: please answer question 9

A: Capitalized interest: Interest cost incurred to finance the construction of a long term construction…

Q: 8. Brown Company uses fair value model for its investment property. At December 31, 2021, the…

A: As per IAS – 40, an investment property will be a land or a building or part of a building or both…

Q: What is the carrying value of the right of use asset on December 31, 2021? ₱ 1,175,000 ₱…

A: Right of use asset initial recognition on January 1 2021 = Present value of lease payments +initial…

Q: 2. On Sept 30, 2020, ABC acquired a building to earn rent through operating leases. The investment…

A: Investment property is land or building or both held by the owner for the purpose of Earning…

Q: 30. A building previously occupied by Grand Company with a cost of P10 million and an accumulated…

Q: (1) An intangible asset is acquired in connection with a business acquisition O A. Intangible assets…

A: Intangible Assets The examples for the intangible assets are goodwill, copyright, patent, francize,…

Q: Mysore Company acquired a patent on January 1, 2022, for $75,000. The patent has a remaining legal…

A: Note: Patent is amortized during the period in which benefit received from the same. Legal life of…

Q: by issuing 1,000 ₱1,000 8% bonds, currently quoted at 103. Provided that the entity is using the SYD…

A: Depreciation expense refers to the reduction in the cost of a fixed asset due to its use or passage…

Q: In 2021, Zhang recognized a $45,000 gain on the sale of Section 1231 property. Over the previous…

A: Introduction:- Calculation of Zhang's 2021 gain is characterized as follows under:- First find out…

Q: 7. NCI in net assets (i.e., NCI's fair value) at the acquisition date: 8. Goodwill at the…

A: You have asked multiple sub-parts kindly resubmit the remaining sub-parts as our guidelines have to…

Q: 197 intangibles: Oa. Include intangible assets created and not purchased by the taxpayer Ob. Are…

A: Intangible assets are those assets which are not physically existed. In simple, these are those…

Q: An entity purchased an investment property on January 1,2020 at a cost of P4,000,000. The property…

A: As per IAS 40 "Investment property", for recording investment property in books of account, one of…

Q: 16. Buttercup Company leased a property to Dickies Corporation on January 1, 2020 for a period of 8…

A: Lease receivable on January 1, 2020 =present value on January 1, 2020 - First payment on January 1,…

Q: please answer question 6

A: Meaning of DepreciationDepreciation is an accounting method of allocating the cost of a tangible or…

Q: Classificati 1 An entity invests in a pool of assets that is managed by an investment house. In…

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Alabama Corp. acquired an investment property on January 2, 2022, at a total cost of P8 million. The…

A: Given that, Cost of investment property = P8,000,000 Useful life of investment property = 25 years…

Q: 6. Entity A acquires an investment property for P1,000,000 cash. Additional costs incurred are as…

Q: On January 1, 2020, Marshall acquired an investment for P500,000 plus a purchase commission of…

A: Under FTOCI investment should be measured at fair value on year end

Q: 6. Entity X sells a building to Entity Y and simultaneously leases Sale and a it back. Relevant…

A: Gain on sale of building = Fair Value - Carrying Amount Additional financing provided = Sale Price -…

Q: Assume that ABC, Inc, acquires a competitor's assets on June 10, 2020. The purchase price was…

A: As per section 197, intangible assets, any intangible asset acquired in relation to the acquisition…

Q: 5. How should accounting fees for acquisition be treated? A. Expensed in the period of acquisition…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: .In Jan of 2018, Entity D purchased a patent at a cost of P200,000. Legal and filing fees of P50,000…

A: solution given Purchase cost 200000 Legal and filing fees 50000 Estimated life 10…

Q: On Sept 30, 2020, ABC acquired a building to earn rent through operating leases. The investment…

A: As per IAS 40- Investment property, Investment property is the land or building or both held for the…

Q: 12. a. Fast owns 100% of Slow and had recorded $700,000 of goodwill from acquiring Slow many years…

A: Goodwill is an intangible asset that is a result of acquiring another company. Other fixed assets…

Q: An entity owns two investment properties, X and Y, the fair values of which are: December 31, 2026…

A: Given that, Original cost of each property = P 9 million or P 9,000,000 Estimated useful life = 10…

Q: Amortization expense is recorded for: A. A franchise established with a contract that allows for…

A: Amortization :— It is the process of writing off of cost of intangible assets over its estimated…

Q: 1. Action Company acquired an investment property with an installment price of P2,500,000. The…

A: Cost of acquiring the property includes all the cost incurred in present value terms. Cost of…

Q: 19. On May 01, 2020, Maria Company acquired the net assets of Luisa Company for a consideration…

A: As per IFRS 3 Contingent consideration requires the acquirer to recognize any contingent…

Q: On July 1, 2022, Oriole Company purchased the copyright to Cheyenne Corp. for $260000. It is…

A: Copyright has been amortized over the useful life of the assets. It is assumed that account close on…

Q: 2 The goodwill of Dolly Company was due to the acquisition of Puppy on December 1, 2022. The…

A: Goodwill: Goodwill is an intangible asset when one organization procures another. It incorporates…

Q: 7. Positivity Enterprises accounted for noncurrent assets using the revaluation model. On September…

A: As per IFRS 5 Non current assets held for sale, If an asset is measured as per revaluation model…

Q: Question 5 The intangible asset of Goodwill: O A. Is amortized over a period of 20 years using the…

A: SOLUTION- LIMITED LIFE INTANGIBLES ARE AMORTIZED THROUGHOUT OUT THE USEFUL LIFE OF THE INTANGIBLE…

Q: 3. What amount should be recognized as gain on reclassification of the equipment in 2023? * Problem…

A: The correct calculation of the answer is given in the following steps for your reference

Q: 24. Norway Company owned two investment properties with the following details: Fair Value Dec.…

A: Initial costs are the costs which are recorded when the resources are purchased and fair value is…

Q: 9s. 5 A company purchased a drill press priced at $170,000 in year 0. The company additionally…

A: Depreciation under MACRS for seven years period is calculated based on the given depreciation rates…

Concept explainers

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.

Question

100%

12 In a taxable asset acquisition, amounts allocated to Class VI and Class VII assets will likely be amortized by the buyer over how many years:

a. 5 years under IRC 167
b. 20 years under IRC 168
c. 15 years under IRC 197
d. 39.5 years under IRC 212

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

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

11 In a taxable asset acquisition, the seller would likely pay ordinary income taxes on the gain resulting from the sale of which of the following assets: a. Inventory b. Accounts Receivable c. Recaptured Depreciation Amounts under IRC 1245 d. All of the above
5. How should accounting fees for acquisition be treated? A. Expensed in the period of acquisition B. Capitalized as part of acquisition cost C. Deferred and amortized D. Deferred until the company is disposed of or wound-up 6.The excess of the price paid over the fair value of the net identifiable assets acquired should be recognized as A. Goodwill to be amortized periodically for 20 yearS. B. Expenses immediately C. Goodwill not subject to amortization but subject to impairment D. Goodwill to be amortized for 40 years 7.Under PFRS 3 (Business Combinations) A. Both direct and indirect costs are to be capitalized B. Both direct and indirect costs are to be expensed C. Direct costs are to be capitalized and indirect costs are to be expensed D. Indirect costs are to be capitalized and direct costs are to be expensed
9. Under PAS 38 Intangible Assets, intangible assets are amortized a. using straight-line method applied to the shorter of an . intangible asset's useful life and legal life b. using an amortization method that best reflects the pattern in which the asset's future economic benefits are expected to be consumed by the entity. C. using a residual value of zero, except in cases where the revaluation model if applied. d. all of these 10. Changes in amortization method, useful life, and residual value are changes in accounting estimates and are accounted for a. prospectively. b. retrospectively. C. a or b d. not accounted
Question 8.1.25 The following information relates to the sale of a piece of land in the current taxation year: Adjusted cost base of land: $275,000 Total proceeds of disposition: $500,000 In the current year, the seller received $200,000 of the proceeds of disposition in cash and a note payable for the remainder ($300,000). What is the maximum ITA40(1)(a)(iii) capital gains reserve that can be claimed by the seller in the current year. OA. $135,000 O B. $0 OC. $225,000 OD. $180,000
With regard to IAS 16 Property, Plant and Equipment, which of the following statements is true? A Any assets where management believe the carrying amounts and market values are materially different may be revalued B Assets which are carried under the revaluation model must be revalued every five years C Increases in value on an initial revaluation are always credited directly to equity D The fair value of land and buildings must be determined on an existing use basis
Which of the following is a requirment regarding replacement property for a deferred like kind exchange A Replacement proepty must be identified within 3 years before the transfer of the TP propery. B. The tax return for the year of the trnsfer mqy no be filed before the replacemnt property is acquired C the value of identified replacemnt properties may not exceed 500% the aggre
Problem 10-29 (IFRS)On January 1, 2020, Yemen Company leased an equipment for 6 years fromanother entity. The entity recorded the asset at P 4, 800, 000 which includeda purchase option of P 100, 000.At the commencement date, the lessee is reasonably certain to exercise thepurchase option. The equipment had an eight-year useful life and a fair value of P 300, 000 atthe end of the useful life.On January 1, 2026, the entity did not exercise the purchase option.What is the loss on finance lease to be recognized by Yemen Company for2026?a. 1, 325, 000b. 1, 425, 000c. 200, 000d. 0
How much is the cost of the qualifying asset on initial recognition? * 15,045,000 13,010,000 14,970,900 14,920,000
1. Assuming the investment is appropriately recognized as financial assets at amortized cost: What is the carrying value of the investment on December 31, 2020? 2. Assuming the investment is appropriately recognized as financial assets at amortized cost: Determine the gain or (loss) to be recorded upon the sale of the investment. 3. Assuming the investment is appropriately recognized as financial assets at amortized cost: How much interest income is to be recognized in 2021?
Prepare a nowchart for MACRS depreciationicost recovery of fixed assets. You may limit your flowchart to tangible personal property falling into the 5 and 7 year classes and roal property used in rental and non-rental classes. For purposes of your flowchart, you should assume that Soction 179 exists as well as any "bonus depreciation" provisions that would apply to 2023 acquisitions. Your flowchart does not need to reflect any limitations applicable to automobiles. You may also ignore any depreciation implications related to: Section 179 bonus depreciation on REAL property Alternate MACRS lives/ methods Alternative Minimum Tax State Income taxes You should base your flowchart on 2023 tax provisions. FORMAT Your fiowchart(s) should be asable reference tool that one could follow to determine the proper treatment for any covered situation.
- What is the investment carrying amount at December 31, 2021? A. P1,920,000 B. P1,790,000 C. P1,730,000 D. P1,700,000 - Assume the excess of acquisition cost over the underlying equity acquired is due to a piece of equipment with remaining life of 5 years on the date of investment acquisition, and a straight-line depreciation basis, what is the investment carrying amount at December 31, 2021? A. P1,920,000 B. P1,790,000 C. P1,745,000 D. P1,730,000
What is the treatment of a § 179 expensing carryforward? Any § 179 amount in excess of business income / the asset acquisition cost limitation is carried forward to future taxable years and added to/ deducted from other amounts eligible for expensing. The § 179 amount eligible for expensing in a carryforward year is limited to the greater / lesser of (1) the current statutory dollar amount increased / reduced by the cost of § 179 property placed in service in excess of the appropriate acquisition limit in the carryforward year or (2) the business income / asset acquisition cost limitation in the carryforward year.