Concepts in Federal Taxation 2019 (with Intuit ProConnect Tax Online 2017 and RIA Checkpoint 1 term (6 months) Printed Access Card)
26th Edition
ISBN: 9781337702621
Author: Kevin E. Murphy, Mark Higgins
Publisher: Cengage Learning
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Chapter 10, Problem 21P
To determine
Find out the assets that are not subject to cost recovery using depreciation and provide the reason.
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homework i
Carver Incorporated purchased a building and the land on which the building is situated for a total cost of $846,300 cash. The land
was appraised at $194,649 and the building at $778,596.
Required:
a. What is the accounting term for this type of acquisition?
b. Determine the amount of the purchase cost to allocate to the land and the amount to allocate to the building.
c. Would the company recognize a gain on the purchase?
d. Record the purchase in a horizontal statements model.
Complete this question by entering your answers in the tabs below.
Required A
Required B Required C
Required D
Check my work
Record the purchase in a horizontal statements model.
Note: Do not round intermediate calculations. Round your final answers to nearest whole dollar. In the Statement of Cash Flows column, use the initials OA to designate operating
IA for investing activity, FA for financing activity, NC for net change in cash and NA for not affected. Enter any decreases to account balances and…
Evergreen Corporation (calendar year-end) acquired the following assets during the current year: (Use MACRS Table 1 and Table 2.)
Â
Asset
Date Placed in Service
Original Basis
Machinery
October 25
$ 90,000
Computer equipment
February 3
25,000
Used delivery truck*
August 17
38,000
Furniture
April 22
175,000
Â
*The delivery truck is not a luxury automobile.
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b. What is the allowable depreciation on Evergreen’s property in the current year if Evergreen does not elect out of bonus depreciation?
DLW Corporation acquired and placed in service the following assets during the year:
Date
Cost
Asset
Acquired Basis
Computer equipment 3/14
S
16,500
Furniture
2/15
S
18,500
Commercial building
12/16
S
339,000
Assuming DLW does not elect §179 expensing and elects not to use bonus depreciation, answer the following questions:
What is DLW's year 3 cost recovery for each asset if DLW sells all of these assets on 5/21 of year 3?
computer equipment:
furniture:
commercial building:
Total:
Chapter 10 Solutions
Concepts in Federal Taxation 2019 (with Intuit ProConnect Tax Online 2017 and RIA Checkpoint 1 term (6 months) Printed Access Card)
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