10 5.5. A corporation sold a piece of equipment during the current tax year for $78,600. The accounting recordsshow that its initial cost was $190,000 and the accumulated depreciation charges were $139,200. Based onthis information, what is the gain or loss on disposal?(a) A loss of $111,400(b) A loss of $27,800(c) A gain of $50,800(d) A gain of $27,800

Gain or loss on sale of an asset can be calculated by comparing the book value of the asset with the…

Answered: 5.5. A corporation sold a piece of…

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter12: Corporations: Organization, Capital Structure, And Operating Rules

Section: Chapter Questions

Problem 42P

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5. During the current year an entity sold a piece of equipment used in production. The equipment had been accounted for using the revaluation method and details of the accounts and sale are presented below: Sales price P100,000 Equipment carrying amount (net) 90,000 Revaluation surplus 20,000 Which of the following is correct regarding recording the sale? Group of answer choices The gain that should be recorded in other comprehensive income is P10,000 The gain that should be recorded in profit and loss is P10,000; the P20,000 revaluation surplus may be transferred to retained earnings. The gain that should be recorded in other comprehensive income is P30,000 The gain that should be recorded in profit and loss is P30,000
A corporation sold a piece of equipment during the tax year for $85,200. The accounting records show that its cost basis is $190,000 and the accumulated depreciation is $150,000. Does the company owe additional taxes due to this sale? no excel
4. A company establishes a depreciation account for an asset that is classified as Sec.1245property. The account is based on the MACRS with a life of seven years and an initial cost of$100,000. Without considerable of the sale of this asset, the company's taxable income is$400,000. Determine the following if the asset is sold after 5 years: a. The federal tax liability if the asset is sold for$15,000. b. The federal tax liability if the asset is sold for$160,000. c. The federal tax liability if the asset is sold for$90,000.
An asset's book value is $18,000 on December 31, Year 5. The asset has been depreciated at an annual rate of $3,000 on the straight-line method. Assuming the asset is sold on December 31, Year 5 for $15,000, the company should record: A. A loss on sale of $12,000. B. A gain on sale of $12,000. C. Neither a gain nor a loss is recognized on this transaction. D. A gain on sale of $3,000. E. A loss on sale of $3,000.
Lelak Company was formed on January 1, year 2. Its machinery is being depreciated using the MACRS for income tax reporting and the straight-line method for financial statement reporting. Information concerning depreciation amounts under each method is as follows: Year Year 2 Year 3 MACRS $600,000 800,000 Straight-line method O $30,000 O $150,000 O $210,000 O $90,000 $400,000 View Policies 500,000 Assuming that the enacted income tax rate is 30% for all affected years, the amount of deferred taxes charged to expense in Lelak's year 3 income statement should be
Assume a company’s beginning and ending balances in the Accumulated Depreciation account are $30,000 and $44,000, respectively. During the period the company sold one noncurrent asset that had an original cost of $8,000. The cash proceeds from the sale were $3,000 and the gain on the sale was $1,000. What is the amount of the depreciation charges that the company would include in the operating activities section of its statement of cash flows? Multiple Choice $18,000 $20,000 $24,000 $8,000
Additional information (a) The entity sold some tangible non-current assets, which had a net book value of $200 million. The cost of sales figure includes a loss of $10 million on this disposal. (b) Cost of sales is arrived at after charging depreciation on the tangible non-current assets of $42 million. (c) Dividends paid during the year were $55,000. IMPORTANT: if your answer is 100,000 for this question please write 100 and IGNORE 000 while writing answer. If you write answer with 000 it will be marked as incorrect Find cashflow from Operations
1. SAM Co. has gross property, plant and equipment totaling AED 55 million, depreciation expense this year of AED 2 million , and accumulated depreciation last year of AED 8.5 million . What is SAM's net property, plant and equipment?
The net book value of a company's non-current assets was $200,000 at 1 August 20X8. During the year ended 31 July 20X9, the company sold non-current assets for $25,000 on which it made a loss of $5,000. The depreciation charge for the year was $20,000. What was the net book value of non-current assets at 31 July 20X9? A $150,000 B $155,000 C $160,000 D $180,000
The carrying value of a company's non-current assets was $200,000 at 1 August 20X0. During the year ended 31 July 20X1, the company sold non current assets for $25,000 on which it made a loss of $5,000. The depreciation charge of the year was $20,000. What was the carrying value of non currenta assetsat 31 July 20X1?
This year, Sigma, Incorporated generated $637,500 income from its routine business operations. In addition, the corporation sold the following assets, all of which were held for more than 12 months: Initial Basis $ 165,200 110,800 Accumulated Depreciation $0 88,640 223,500 206,000 Marketable securities Production equipment Business realty: Land Building. "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 $169,400 rather than $73,750. Complete this question by entering your answers in the tabs below. Sale Price $ 73,750 38,000 0 61,800 236,750 231,000 Required A Required B 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. Taxable income
Prepare an income statement with the information listed below: Accumulated Depreciation $ 35,000Accounts Payable $ 65,000Advertising Expense $ 20,625Prepaid Advertising $ 61,875Common Stock $ 50,000Depreciation Expense $ 12,500Dividend Payable $ 50,000Dividends $ 100,000Income Tax expense $ 48,000Income Tax Payable $ 35,000Interest Expense $ 3,750Interest Revenue $ 500Loss on Disposal of Assets $ 10,000Prepaid Rent $ 56,250Rent Expense $ 18,750Retained Earnings $ 836,875Sales Revenue $ 300,000Utilities Expense $ 8,750Utilities Payable $ 7,000Wage Expense $ 41,250Wages Payable $ 10,125

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