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Required: a. Compute Sigma's taxable income assuming that it used the straight-line method to calculate depreciation on the building and has no nonrecaptured Section 1231 losses. b. Recompute taxable income assuming that Sigma sold the securities for $159,200 rather than $75,000.

Required: a. Compute Sigma's taxable income assuming that it used the straight-line method to calculate depreciation on the building and has no nonrecaptured Section 1231 losses. b. Recompute taxable income assuming that Sigma sold the securities for $159,200 rather than $75,000.

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter4: The Balance Sheet And The Statement Of Shareholders' Equity
Section: Chapter Questions
Problem 6RE: Oz Corporation has the following assets at year-end: Patents (net), 26,000; Land, 50,000; Buildings,...
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This year, Sigma Incorporated generated $662,250 income from its routine business operations. In addition, the corporation sold the following assets, all of which were held for more than 12 months: Marketable securities Production equipment Business realty: Land Building Accumulated Initial Basis Depreciation* $ 149,600 103,600 Required A Required B 237,000 270,000 $0 82,880 Taxable income 81,000 *Through date of sale. Required: a. Compute Sigma's taxable income assuming that it used the straight-line method to calculate depreciation on the building and has no nonrecaptured Section 1231 losses. b. Recompute taxable income assuming that Sigma sold the securities for $159,200 rather than $75,000. Sale Price $ 75,000 41,750 Complete this question by entering your answers in the tabs below. 247,250 210,500 Compute Sigma's taxable income assuming that it used the straight-line method to calculate depreciation on the building and has no nonrecaptured Section 1231 losses. < Required A Required B >
Transcribed Image Text:This year, Sigma Incorporated generated $662,250 income from its routine business operations. In addition, the corporation sold the following assets, all of which were held for more than 12 months: Marketable securities Production equipment Business realty: Land Building Accumulated Initial Basis Depreciation* $ 149,600 103,600 Required A Required B 237,000 270,000 $0 82,880 Taxable income 81,000 *Through date of sale. Required: a. Compute Sigma's taxable income assuming that it used the straight-line method to calculate depreciation on the building and has no nonrecaptured Section 1231 losses. b. Recompute taxable income assuming that Sigma sold the securities for $159,200 rather than $75,000. Sale Price $ 75,000 41,750 Complete this question by entering your answers in the tabs below. 247,250 210,500 Compute Sigma's taxable income assuming that it used the straight-line method to calculate depreciation on the building and has no nonrecaptured Section 1231 losses. < Required A Required B >
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