Partners A and B will contribute cash and C will contribute an equipment acquired 2 years ago at the cost of 100,000. the equipment is being depreciated on a straight line method for 5 years without scrap value. The age of the equipment at the date of formation is one year and three months. At that date, the fair value of the equipment is 110,000. The amount to be credited to C capital is A. 25,000 B. 75,000 C. 100,000 D. 110,000

Partners A and B will contribute cash and C will contribute an equipment acquired 2 years ago at the cost of 100,000. the equipment is being depreciated on a straight line method for 5 years without scrap value. The age of the equipment at the date of formation is one year and three months. At that date, the fair value of the equipment is 110,000. The amount to be credited to C capital is A. 25,000 B. 75,000 C. 100,000 D. 110,000

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter9: Acquisitions Of Property

Section: Chapter Questions

Problem 42P

See similar textbooks

Similar questions

The following intangible assets were purchased by Goldstein Corporation: A. A patent with a remaining legal life of twelve years is bought, and Goldstein expects to be able to use it for seven years. B. A copyright with a remaining life of thirty years is purchased, and Goldstein expects to be able to use it for ten years. For each of these situations, determine the useful life over which Goldstein will amortize the intangible assets.
A contractor imported a bulldozer paying P650k to the manufacturer, freight expense amounted to P30k, permits & other exp P25k. If the contractor estimates the life of the bulldozer to be 25 years with salvage value of P50k, determine the year 15 depreciation and its corresponding Book value at the end of 15 years using Sinking fund at 10% and SYD Method.
At the beginning of current year, Darwin Company purchased a plating machine for 5,400,000. The entity received a government grant of 400,000 toward this capital cost. The machine is to be depreciated on a 20% reducing balance basis over 10 years. The estimated residual value is P200,000. Required: Prepare journal entries for the current year, assuming the grant is accounted for as deferred income and deduction from asset.
Jim exploration site cost $1,800,000 at the beginning of the year. The site will be operated for 10 years at which time Bull must return the site to its original state. It is estimated that this will cost $750,000 at the end of the site’s useful life. Assume that Bull uses private entity GAAP. a. Prepare the journal entries for the acquisition of the site and the asset retirement obligation. The effective interest rate is 6%. b. Prepare the journal entries for December 31, 2022.
An asset for drilling was purchased and placed in service by a petroleum production company. Its cost basis is $60,000 and it has an estimated MV of $12,000 at the end of an estimated useful life of 14 years. Compute the accumulated depreciation in the third year and the BV at the end of 5th year of life by each of these methods at the rate of 9%: a. The SF Method (Sinking Fund Method)- Provide the complete solution and cash flow diagram
At the beginning of current year, Apple Company purchased a plating machine for P5,400,000. The entity received a government grant of P400,000 toward this capital cost. The machine is to be depreciated on a 20% reducing balance basis over 10 years. The estimated residual value is P200,000. Required: Prepare journal entries for the current year, assuming the grant is accounted for as: a. Deferred income b. Deduction from asset
Natalie Company purchased a machine for P6,600,000 on January 1, 2022 and received a government grant of P600,000 towards the capital cost. The policy is to treat the grant as a reduction in the cost of the asset. The machine is to be depreciated on a straight line basis over ten years with a residual value of P500,000. On January 1, 2024, the grant became fully repayable because of noncompliance with conditions. 1. What is the depreciation for 2022? A. 610,000 B. 600,000 C. 660,000 D. 550,000 2. What is the depreciation for 2024? A. 610,000 B. 600,000 C. 780,000 D. 730,000
A firm bought an equipment for P56,000. Other expenses including installation amounted to P4,000. The equipment is expected to have a life of 16 years with a salvage of 10 percent of the original cost. Determine the book value at the end of 12 years by (a) the straight line method and (b) sinking fund method at 12% interest.
2. An industrial plant bought a generator set for P90,000. Other expenses including installation amounted to P10,000. The generator set is to have a life of 17 years with a salvage value at the end of life of P5,000. Determine the depreciation charge during the 13th year and the book value at the end of 13 years by: a. Declining Method b. Double Declining Balance Method c. Sinking Fund Method d. SYD Method Interest is at 12%.
The first of certain equipment is P3,000,000.00 with a freight cost of P200,000.00 and taxes and legal fee of P360,000.00. if the salvage value of the machine is P300,0000 with an expected life of 8 years. Find the total depreciation at the end of 5th year. Using a) a) straight line method b) declining balanced method c) sinking fund method d) sum-of-year-digit method. Use r = 5%
a company has purchased a bus for its officers for P14,00,000. the expected life of the bus is 8 years. the salvage value of the bus at the end of its life is P1.2M. using the sinking fund method of depreciation, find the total depreciation at the end 3 years. use i = 8.2%
A company bought a machine for BD 250,000 which has a useful life of 10 years and can be sold for BD50,000 at the end of its useful life. In addition, the cost of installing the machine is BD25,000 while the cost of dismantling is BD 7,500. Determine the accumulated depreciation and book value at the end of 8th year using sinking fund if interest is 12%. a. At the end of Year 8 the Book Value of Machine is BD 112,044 and the Accumulated Depreciation is BD 162,956. b. At the end of Year 8 the Book Value of Machine is BD 100,551.44 and the Accumulated Depreciation is BD 115,948.56. c. At the end of Year 8 the Book Value of Machine is BD 200,551.44 and the Accumulated Depreciation is BD 220,948.56. d. At the end of Year 8 the Book Value of Machine is BD 130,551.44 and the Accumulated Depreciation is BD 170,948.56.