As provided in the regulations under 471 when using the full absorption costs, which of the following costs must be included in or excluded from inventoriable costs, depending on their treatment for financial reporting purposes :

Select one:

a. Research and development costs

b. Rent

c. Factory administrative expenses

d. Indirect labor

ABC Corp. makes the following fixed asset acquisitions in 2018:

Office furniture on February 15 for $40,000

Copier on June 30 for $5,000

Improvements (constituting real property) to the office building on October 15 for $100,000

Machinery on December 1 for $25,000

Assuming ABC does not make a 179 election with respect to any of its acquisitions and the ADS method is not used, which of the following statements is true:

Select one:

a.

The mid-quarter convention is not applicable

b.

All acquisitions will use the half-year convention

c.

All depreciation will be calculated using the double declining balance method

d.

AAll acquisitions will use the mid-month convention.

Woodsboro Corp. purchases a parcel of land (the unit of property) without realizing that the soil was contaminated by leaking underground storage tanks left by a previous owner. Under the repair and capitalization regulations, Woodsboro's remediation costs to remove the contaminants and ameliorate a material condition or defect that existed prior to its acquisition of the land are:

Select one:

a.

Deducted as a current expense

b.

Capitalized as a betterment of the property

c.

Amortizable as 197 intangible asset

d.

None of the above

The simplified resale method requires which of the following indirect costs to be capitalized?

Select one:

a.

Marketing costs

b.

Off-site storage

c.

Purchased inventory

d.

All of the above

The regulations provide that merchandise should be included in inventory of the taxpayer having ownership of the property. This is determined by all facts and circumstances. These include all of the following except:

Select one:

a.

Intent of the parties

b.

Benefits and burdens of ownership

c.

Who bears the risk of loss

d.

State of incorporation