22. Mark the correct answer. In calculating depreciation: A. Straight-line depreciation is higher than double declining balance

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22. Mark the correct answer. In calculating depreciation:

A. Straight-line depreciation is higher than double declining balance depreciation in the early years
B. Straight-line depreciation is higher than double declining balance depreciation in the later years
C. Double declining balance is a method of straight line depreciation
D. MACRS depreciation requires that salvage value be taken into account

23. In January 2011, Keystone Trucking company exchanged an old truck, which cost $74,000 and had accumulated depreciation of $38,000, for a new truck having a fair market value of $82,000. In connection with the exchange, Keystone paid $40,000 in cash. What is the basis of the new truck?

24. Grevilla Inc. is an S corporation that has chosen a fiscal year ending November 30. For the fiscal year ended November 30, 2011, Grevilla Inc. had taxable income of $180,000 and the prior year made a required payment of $1,000. What is the amount of the required payment which should be made in 2012?

25. Which of the following is true about capital gains?

A. Short-term capital gains are not netted with other capital gains and losses
B. For 2011, long-term capital gains are subject to special tax treatment
C. Long-term capital gains are never taxed
D. Net short-term capital gains are not netted with net long-term capital losses

26. Kate is an accrual basis, calendar-year taxpayer. On November 1, 2011, Kate leased out a building for $4,000 a month. On that day Kate received 6 months rental income on the building, a total of $24,000. How much income must Kate include on her 2011 tax return as a result of this transaction?

27. Walnut Interests is a partnership owned equally by Bob, Jon and Gary. Bob and Jon each have a November 30 tax year-end, while Gary has a January 31 tax year-end. Under the general rule, what tax year end should the partnership adopt?

A. December 31
B. January 31
C. November 30
D. November 30 0r January 31

28. Which of the following is not an acceptable method of accounting under the tax law?

A. The accrual method
B. The cash method
C. The hybrid method
D. All of the above are acceptable

29. Simon sold investment property 2 years ago for $750. Simon's basis in the property was $200. Simon is receiving $150 per year from the buyer. Simon reports this income on the installment method. If Simon collects $150 in principal during the current year, how much gain should he report from the sale for the year?

A. $90

B. $0

C. $75

D. $110

E. None of these choices are correct.