A Company constructs a new production shed (section 1250 asset) at a cost of $3,500,000 and...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
A Company constructs a new production shed (section 1250 asset) at a cost of $3,500,000 and chooses sum-of-the-years depreciations with a life of 15 years. the salvage value of the shed is 350,000. Without considering the sale of the shed the Company's taxable income is 15,000,000, determine the following if the asset is sold after 7 years a) The federal tax liability of the asset is sold for $1,500,000 b) The federal tax liability of the asset is sold for $1,000,000 c) The federal tax liability of the asset is sold for $2,250,000 A Company constructs a new production shed (section 1250 asset) at a cost of $3,500,000 and chooses sum-of-the-years depreciations with a life of 15 years. the salvage value of the shed is 350,000. Without considering the sale of the shed the Company's taxable income is 15,000,000, determine the following if the asset is sold after 7 years a) The federal tax liability of the asset is sold for $1,500,000 b) The federal tax liability of the asset is sold for $1,000,000 c) The federal tax liability of the asset is sold for $2,250,000
Expert Answer:
Answer rating: 100% (QA)
a Federal tax liability if the asset is sold for 1500000 133375... View the full answer
Related Book For
Intermediate accounting
ISBN: 978-0077647094
7th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
Posted Date:
Students also viewed these accounting questions
-
Turnip Company purchased an asset at a cost of $10,000 with a ten-year life during the current year. The company uses differing depreciation methods for financial reporting and income tax purposes....
-
Francis Corporation purchased an asset at a cost of $50,000 on March 1, 2014. The asset has a useful life of 8 years and a salvage value of $4,000. For tax purposes, the MACRS class life is 5 years....
-
Wildhorse Corporation purchased an asset at a cost of $60,000 on March 1, 2020. The asset has a useful life of 8 years and a salvage value of $4,800. For tax purposes, the MACRS class life is 5...
-
Bob Bristol just called to congratulate you on your excellent work on the various assignments at CII.He now wants you to do some capacity analysis for Meghan Willoughby, the Chief Purser. Meghan is...
-
What are the limitations of the payback period method for making capital-budgeting decisions (e.g., whether to accept or reject a proposed investment)? Does the present value payback period overcome...
-
As CEO of Riverside Marine, Rachel Moore knows it is important to control costs and to respond quickly to changes in the highly competitive boat-building industry. When Gerbig Consulting proposes...
-
How to draft an answer to a complaint?
-
Crafty Paint prepares and packages paint products. Crafty Paint has two departments: Blending and Packaging. Direct materials are added at the beginning of the blending process (dyes) and at the end...
-
(3) Prove that the law of motion of capital per effective worker in the Solow-Swan model with labor-augmenting technology is = - kts f(kt) (8+n+g)kt, Kt where yt = f(kt) = F(kt, 1) = F( KK, 1), kt =...
-
On January 1, 2019, Concord Corp. signs a contract to lease nonspecialized manufacturing equipment from Stone Inc. Concord agrees to make lease payments of $47,500 per year. Additional information...
-
You are Joan Jacks an Accountant for Riscko, a company that specialises in risk management. You regularly assess whether your debtors will become bad or doubtful debts. Riskco currently has two...
-
Economics Suppose the weekly demand at each regional distribution center (RDC) is normally distributed with a mean =117 and standard deviation =23. The company is considering to replace the RDCs with...
-
They should make a presentation only in PowerPoint with the following topics: (must upload the presentation by Sunday, April 09th) Make a brief description of the project (Scope) and Non-scope 2....
-
1) Do you like working in teams? Why or why not? Use examples if you have worked in teams before. 2) How do you make decisions in the workplace? Explain in detail. 3) What does Power mean to you in...
-
A company reports an annual cost of goods sold (COGS) totaling $375,000. The firm currently achieves an inventory turn equal to 4 and inventory carrying costs are currently 20%. If inventory turns...
-
Create an infographic explaining eitherclimate or environmental justice. In addition to a brief explanation, you must: Describe an issue relating to either environmental or climate inequity Include...
-
Below is a partial Statement of Financial Position of Malika Bhd as at 31 December 2021: Malika Bhd Partial Statement of Financial Position As at 31 December 2021 i. ii. As at 31 December 2021,...
-
Teasdale Inc. manufactures and sells commercial and residential security equipment. The comparative unclassified balance sheets for December 31, 2015 and 2014 are provided below. Selected missing...
-
In 2013, Adonis Industries changed its method of valuing inventory from the average cost method to the FIFO method. At December 31, 2012, Adoniss inventories were $47.6 million (average cost)....
-
On January 1, 2013, Cook Textiles leased a building with two acres of land from Peck Development. The lease is for 10 years. No purchase option exists and the property will revert to Peck at the end...
-
At December 31, 2012, Cord Companys plant asset and accumulated depreciation and amortization accounts had balances as follows: Depreciation methods and useful lives: Buildings150% declining balance;...
-
Consult a reputable dictionary (such as the Oxford Dictionary) and write down the meaning of the following words. They may each have several meanings so extract the ones that relate more to fact or...
-
List three advantages and disadvantages of preparing financial accounts only once a year. Advantages Disadvantages 1 2 3 2 m
-
A contracting company divides each of its sales into five stages: (1) on order; (2) on despatch; (3) on installation; (4) on commissioning; and (5) on completion of a 12- month warranty period....
Study smarter with the SolutionInn App