Principles Of Taxation For Business And Investment Planning 2020 Edition
23rd Edition
ISBN: 9781259969546
Author: Sally Jones, Shelley C. Rhoades-Catanach, Sandra R Callaghan
Publisher: McGraw-Hill Education
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Question
Chapter 6, Problem 23AP
a.
To determine
Identify the amount of revenue that should be reported on its financial statements for 2019, 2020, and 2021.
b.
To determine
Identify the amount of taxable income that should be recognized in 2019, 2020, and 2021.
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During 2021, Ming's Book Store paid $486,000 for land and built a store in Naperville, Illinois. Prior
to construction, the city of Naperville charged Ming's $1,000 for a building permit, which Ming's paid. Ming's
also paid $15,000 for architect's fees. The construction cost of $670,000 was financed by a long-term
note payable, with interest costs of $28,020 paid at the completion of the project. The building was completed
June 30, 2021. Ming's depreciates the building using the straight-line method over 35 years, with estimated
residual value of $330,000.
Read the requirements.
ISY
ent 1. Journalize transactions for the following (explanations are not required): a. Purchase of
the land, b. All the costs chargeable to the building in a single entry, and c. Depreciation on the building for
2021. (Record debits first, then credits. Exclude explanations from any journal entries.)
a. Journalize the purchase of the land.
Journal Entry
On January 1, 2017, Humble company received a government grant of 60,000,000 to compensate for costs to be incurred in planting trees over a period of 5 years. The entity will incur such costs at 2,000,000 for 2017, 4,000,000 for 2018, 6,000,000 for 2019, 8,000,000 for 2020, and 10,000,000 for 2021.
What amount of income from the government grant is recognized for 2017?
K
During 2021, Ming's Book Store paid $486,000 for land and built a store in Naperville, Illinois. Prior to construction, the city of Naperville charged Ming's $1,000 for a building permit,
which Ming's paid. Ming's also paid $15,000 for architect's fees. The construction cost of $670,000 was financed by a long-term note payable, with interest costs of $28,020 paid at the
completion of the project. The building was completed June 30, 2021. Ming's depreciates the building using the straight-line method over 35 years, with estimated residual value of
$330,000.
Read the requirements.
c. Joumalize depreciation on the building for 2021.
Journal Entry
Date
Accounts
Depreciation Expense-Building
Accumulated Depreciation Building
Balance Sheet
Plant assets:
Debit
Less:
5,486
Credit
5,486
Requirement 2. Report Ming's plant assets on the company's balance sheet at December 31, 2021.
***
Check answer
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Chapter 6 Solutions
Principles Of Taxation For Business And Investment Planning 2020 Edition
Ch. 6 - Prob. 1QPDCh. 6 - Prob. 2QPDCh. 6 - Prob. 3QPDCh. 6 - Prob. 4QPDCh. 6 - For many years, Mr. K, the president of KJ Inc.,...Ch. 6 - Prob. 6QPDCh. 6 - Prob. 7QPDCh. 6 - Firm NB, which uses the cash method of accounting,...Ch. 6 - Prob. 9QPDCh. 6 - Prob. 10QPD
Ch. 6 - Prob. 11QPDCh. 6 - Firms generally prefer to engage in transactions...Ch. 6 - Describe the contrasting treatment of prepaid...Ch. 6 - Net operating losses can be carried forward...Ch. 6 - Nello Company owed 23,400 overdue rent to its...Ch. 6 - For each of the following businesses, indicate the...Ch. 6 - Assuming a 21 percent marginal tax rate, compute...Ch. 6 - Prob. 4APCh. 6 - FruAgro Company has average annual gross receipts...Ch. 6 - Prob. 6APCh. 6 - Firm F is a cash basis legal firm. In 2018, it...Ch. 6 - Prob. 8APCh. 6 - Prob. 9APCh. 6 - Prob. 10APCh. 6 - Brillo Company uses the calendar year and the cash...Ch. 6 - NC Company, a retail hardware store, began...Ch. 6 - Prob. 13APCh. 6 - Warren Company is a calendar year, cash basis...Ch. 6 - Prob. 15APCh. 6 - Wahoo Inc., a calendar year taxpayer, leases...Ch. 6 - Prob. 17APCh. 6 - Using a 21 percent rate, compute the deferred tax...Ch. 6 - Prob. 19APCh. 6 - Prob. 20APCh. 6 - Prob. 21APCh. 6 - Prob. 22APCh. 6 - Prob. 23APCh. 6 - Prob. 24APCh. 6 - Prob. 25APCh. 6 - Prob. 26APCh. 6 - Prob. 27APCh. 6 - BZD, a calendar year corporation, made the...Ch. 6 - Prob. 29APCh. 6 - Prob. 30APCh. 6 - Prob. 31APCh. 6 - Prob. 32APCh. 6 - Prob. 33APCh. 6 - GK Company, a calendar year accrual basis...Ch. 6 - Prob. 35APCh. 6 - Prob. 36APCh. 6 - TRW Inc. began business in 2019 and incurred net...Ch. 6 - Prob. 38APCh. 6 - Prob. 39APCh. 6 - Margaret, a married taxpayer filing a joint...Ch. 6 - Prob. 41APCh. 6 - Prob. 1IRPCh. 6 - Corporation DS owns assets worth 550,000 and has...Ch. 6 - Two years ago, a professional theater company paid...Ch. 6 - Prob. 4IRPCh. 6 - Prob. 5IRPCh. 6 - Prob. 6IRPCh. 6 - Every December, Maxo Inc., an accrual basis,...Ch. 6 - Prob. 8IRPCh. 6 - Prob. 9IRPCh. 6 - Corporation WJ began business in 2019 and elected...Ch. 6 - Prob. 11IRPCh. 6 - Bontaine Publications, an accrual basis, calendar...Ch. 6 - Prob. 2RPCh. 6 - Prob. 3RPCh. 6 - Prob. 4RPCh. 6 - Company Y began business in February 2019. By the...Ch. 6 - Prob. 2TPC
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