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
expand_more
expand_more
format_list_bulleted
Videos
Question
Chapter 3, Problem 43P
To determine
Calculate the gain or loss realized from the sale of lots.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
On December 31, 2016, Marin Inc. borrowed $3,720,000 at 13% payable annually to finance the construction of a new building. In 2017, the company made the following expenditures related to this building: March 1, $446,400; June 1, $744,000; July 1, $1,860,000; December 1, $1,860,000. The building was completed in February 2018. Additional information is provided as follows.
1. Other debt outstanding 10-year, 14% bond, December 31, 2010, interest payable annually $4,960,0006-year, 11% note, dated December 31, 2014, interest payable annually $1,984,0002. March 1, 2017, expenditure included land costs of $186,000 3. Interest revenue earned in 2017 $60,760
Determine the amount of interest to be capitalized in 2017 in relation to the construction of the building.
The amount of interest
Queen Company purchased a varnishing machine for P3,000,000 on January 1, 2017. The entity received a government grant of P500,000 in respect of this asset. The accounting policy is to depreciate the asset over 4 years on a straight line basis and to treat the grant as deferred income. What amount of income from the government grant is recognized in 2017?
On January 2, 2017, Indian River Groves began construction of a new citrus processing plant. The
automated plant was finished and ready for use on September 30, 2018. Expenditures for the
construction were as follows:
48.
January 2, 2017
September 1, 2017
December 31, 2017
March 31, 2018
September 30, 2018
$ 600,000
1,800,000
1,800,000
1,800,000
1,200,000
Indian River Groves borrowed $3,300,000 on a construction loan at 12% interest on January 2,
2017. This loan was outstanding during the construction period. The company also had S12,000,000
in 9% bonds outstanding in 2017 and 2018.
The interest capitalized for 2018 was:
a. $374,220
b. $354,915
c. $ 77,220
d. $297,000
Chapter 3 Solutions
Concepts in Federal Taxation 2019 (with Intuit ProConnect Tax Online 2017 and RIA Checkpoint 1 term (6 months) Printed Access Card)
Ch. 3 - Prob. 1DQCh. 3 - Prob. 2DQCh. 3 - Prob. 3DQCh. 3 - Prob. 4DQCh. 3 - Prob. 5DQCh. 3 - Prob. 6DQCh. 3 - Prob. 7DQCh. 3 - Prob. 8DQCh. 3 - Prob. 9DQCh. 3 - Prob. 10DQ
Ch. 3 - Prob. 11DQCh. 3 - Prob. 12DQCh. 3 - Prob. 13DQCh. 3 - Prob. 14DQCh. 3 - Prob. 15DQCh. 3 - Prob. 16DQCh. 3 - Prob. 17DQCh. 3 - Prob. 18DQCh. 3 - Prob. 19DQCh. 3 - Prob. 20DQCh. 3 - Prob. 21DQCh. 3 - Are all losses realized on the sale of capital...Ch. 3 - Prob. 23DQCh. 3 - Prob. 24DQCh. 3 - Prob. 25DQCh. 3 - Prob. 26DQCh. 3 - Prob. 27DQCh. 3 - Prob. 28DQCh. 3 - Prob. 29DQCh. 3 - Prob. 30PCh. 3 - Prob. 31PCh. 3 - Prob. 32PCh. 3 - Prob. 33PCh. 3 - How much taxable income should each of the...Ch. 3 - Prob. 35PCh. 3 - Prob. 36PCh. 3 - Prob. 37PCh. 3 - Prob. 38PCh. 3 - Prob. 39PCh. 3 - Prob. 40PCh. 3 - Prob. 41PCh. 3 - Prob. 42PCh. 3 - Prob. 43PCh. 3 - Prob. 44PCh. 3 - Prob. 45PCh. 3 - Prob. 46PCh. 3 - Devi is the chief executive officer of Nishida...Ch. 3 - Prob. 48PCh. 3 - Prob. 49PCh. 3 - Prob. 50PCh. 3 - Prob. 51PCh. 3 - Prob. 52PCh. 3 - Prob. 53PCh. 3 - Prob. 54PCh. 3 - Prob. 55PCh. 3 - Prob. 56PCh. 3 - Prob. 57PCh. 3 - Prob. 58PCh. 3 - Prob. 59PCh. 3 - Prob. 60PCh. 3 - Prob. 61PCh. 3 - Prob. 62PCh. 3 - Determine whether the taxpayer has income that is...Ch. 3 - Prob. 64PCh. 3 - Prob. 65PCh. 3 - Prob. 66PCh. 3 - Prob. 67PCh. 3 - Prob. 68PCh. 3 - Prob. 69PCh. 3 - Prob. 70PCh. 3 - Prob. 71PCh. 3 - Prob. 72PCh. 3 - Prob. 73PCh. 3 - Prob. 74PCh. 3 - Prob. 75PCh. 3 - Prob. 76PCh. 3 - During the last five months of the year, Dwana...Ch. 3 - Prob. 78PCh. 3 - Prob. 79PCh. 3 - Prob. 80PCh. 3 - Prob. 81PCh. 3 - Lorene, Inc., owns an apartment complex. The terms...Ch. 3 - Prob. 83PCh. 3 - Prob. 84PCh. 3 - Prob. 85PCh. 3 - Prob. 86PCh. 3 - Prob. 87PCh. 3 - Prob. 88PCh. 3 - Prob. 89IIPCh. 3 - Prob. 90IIPCh. 3 - Prob. 91IIPCh. 3 - Prob. 92IIPCh. 3 - Prob. 93IIPCh. 3 - Prob. 94IIPCh. 3 - Prob. 95IIPCh. 3 - Prob. 96IIPCh. 3 - Prob. 97IIPCh. 3 - Prob. 105DCCh. 3 - Kerry is employed as a ticket vendor at an...Ch. 3 - Prob. 107DCCh. 3 - Prob. 108DCCh. 3 - Prob. 109EDC
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
- On January 2, 2016, Indian River Groves began construction of a new citrus processing plant. The automated plant was finished and ready for use on September 30, 2017. Expenditures for the construction were as follows:January 2, 2016 P200,000September 1, 2016 600,000December 31, 2016 600,000March 31, 2017 600,000September 30, 2017 400,000Indian River Groves borrowed P1,100,000 on a construction loan at 12% interest on January 2, 2016. This loan was outstanding during the construction period. The company also had P4,000,000 in 9% bonds outstanding in 2016 and 2017.The interest capitalized for 2017 was: Select one: a. P118,305 b. P124,740 c. P99,000 d. P25,740arrow_forwardDuring 2017, Reticulated Company constructed a new manufacturing facility at a cost of P30,000,000. The expenditures for this building, which was finished late in 2017, were incurred evenly during the year. The entity had the following loans outstanding at December 31, 2017.  10% note to finance specifically construction of the manufacturing facility, dated January 1, 2017, P10,000,000. Unpaid as of December 31, 2017. Investments were made on the proceeds from this loan and income of P100,000 was realized in 2017.  12%, 20-years bonds payable issued at face value on April 30, 2016, P30,000,000.  8%, 5-years payable, dated March 1, 2016, P10,000,000. What amount of interest is capitalized as cost of the new building? A. 1,550,000 B. 1,450,000 C. 1,400,000 D. 1,500,000arrow_forwardOn March 1, 2020, Pina Colada Corp. acquired real estate on which it planned to construct a small office building. The company paid $88,000 in cash. An old warehouse on the property was razed at a cost of $9,000; the salvaged materials were sold for $2,700. Additional expenditures before construction began included $1,400 attorney’s fee for work concerning the land purchase, $5,600 real estate broker’s fee, $7,600 architect’s fee, and $13,300 to put in driveways and a parking lot.(a)Determine the amount to be reported as the cost of the land. Cost of land  $arrow_forward
- On March 1, 2017, Geoffrey Company acquired real estate, on which it planned to construct a small office building, by paying $85,000 in cash. An old warehouse on the property was demolished at a cost of $8,200; the salvaged materials were so for $2,200. Additional expenditures before construction began included $1,500 attorney's fee for work concerning the land purchase, $5,500 real estate broker's fee, $9,100 architect's fee, and $16,000 to put in driveways and a parking lot. Instructions (a) Determine the amount to be reported as the cost of the land. (b) For each cost not used in part (a), indicate the account to be increasedarrow_forwardOn January 1, 2016, Randolf Company signed a contract to have Rory Associates construct a manufacturing facility at a cost of $14,000,000. It was estimated that it would take three years to complete the project. Also on January 1, 2016, to finance the construction cost, Randolf borrowed $14,000,000 payable in seven annual installments of $2,000,000 plus interest at the rate of 9%. During 2016, Randolf made progress payments totaling $5,000,000 under the contract, and the average amount of accumulated expenditures was $3,000,000 for the year. The excess borrowed funds were invested in short-term securities, from which Randolf realized investment income of $330,000. What amount should Randolf report as capitalized interest at December 31, 2016? $510,000 $0 $1,260,000 $270,000arrow_forwardOn March 1, 2020, Westmorlan Company acquired real estate on which it planned to construct a small office building. The company paid $75,000 in cash. An old warehouse on the property was razed at a cost of $8,600; the salvaged materials were sold for $1,700. Additional expenditures before construction began included $1,100 attorney’s fee for work concerning the land purchase, $5,000 real estate broker’s fee, $7,800 architect’s fee, and $14,000 to put in driveways and a parking lot.Instructions(a) Determine the amount to be reported as the cost of the land.(b) For each cost not used in part (a), indicate the account to be debited.arrow_forward
- On March 1, 2020, Swifty Corporation acquired real estate on which it planned to construct a small office building. The company paid $90,000 in cash. An old warehouse on the property was razed at a cost of $10,700; the salvaged materials were sold for $3,300. Additional expenditures before construction began included $1,900 attorney’s fee for work concerning the land purchase, $4,600 real estate broker’s fee, $7,400 architect’s fee, and $14,700 to put in driveways and a parking lot.(a)Determine the amount to be reported as the cost of the land. Cost of land  $ ?arrow_forwardMaragondon Company had the following borrowings during 2018. The borrowings were made for general purposes but the proceeds were used in part to finance the construction of a new building:  Principal Interest 12% bank loan 10,000,000 1,200,000 15% long-term loan 20,000,000 3,000,000  30,000,000 4,200,000 The construction began on January 1, 2018 and was completed on December 31, 2018. Expenditures on the building were made as follows:January 1                    8,000,000June 30                     8,000,000December 31                 4,000,000 The capitalizable borrowing cost isa. 1,680,000b. 1,400,000c. 4,200,000d. 1,620,000  What is the solution for the option A?arrow_forwardBright Co. received a government grant of 10,000,000 to install and run a windmill in an economically backward area. The entity had estimated that such a windmill would cost 25,000,000 to construct. The secondary condition attached to the grant is that the entity shall hire labor in the area where the windmill is located. The construction was completed on January 1, 2014. The windmill is to be depreciated using the straight-line method over a period of 10 years. What amount of grant income should be recognized for 2014? O2,500,000 1,500,000 O 1,000,000 5,000,000arrow_forward
- On December 31, 2016, Headland Inc. borrowed $840,000 at 12% payable annually to finance the construction of a new building. In 2017, the company made the following expenditures related to this building: June 1, $336,000; July 1, $504,000; September 1, $1,008,000; December 1, $504,000. The building was completed in April 2018. Additional information is provided as follows. 1. Other debt outstanding 10-year, 10% bond, dated December 31, 2010, interest payable annually $8,400,000 15-year, 12% note, dated December 31, 2004, interest payable annually $2,100,000 2. Interest revenue earned in 2017 $5,040 Prepare the journal entry to record the capitalization of interest and the recognition of interest expense, if any, at December 31, 2017arrow_forwardOn January 1, 2021, Kendall Inc. began construction of an automated cattle feeder system. The system was finished and ready for use on September 30, 2022. Expenditures on the project were as follows:Â Â January 1, 2021 $ 266,000 Â September 1, 2021 $ 345,000 Â December 31, 2021 $ 345,000 Â March 31, 2022 $ 345,000 Â September 30, 2022 $ 266,000 Â Â Kendall borrowed $670,000 on a construction loan at 9% interest on January 1, 2021. This loan was outstanding throughout the construction period. The company had $3,850,000 in 8% bonds payable outstanding in 2021 and 2022.What was the interest (using the specific interest method) capitalized for 2022?arrow_forwardOn June 1, 2020, the Crocus Company began construction of a new manufacturing plant. The plant was completed on October 31, 2021. Expenditures on the project were as follows ($ in millions): July 1, 2020 94 October 1, 2020 62 February 1, 2021 70 April 1, 2021 41 September 1, 2021 40 October 1, 2021 26 On July 1, 2020, Crocus obtained a $110 million construction loan with a 6% interest rate. The loan was outstanding through the end of October, 2021. The company's only other interest-bearing debt was a long-term note for $100 million with an interest rate of 8%. This note was outstanding during all of 2020 and 2021. The company's fiscal year-end is December 31.What is the amount of interest that Crocus should capitalize in 2020, using the specific interest method?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Depreciation -MACRS; Author: Ronald Moy, Ph.D., CFA, CFP;https://www.youtube.com/watch?v=jsf7NCnkAmk;License: Standard Youtube License