For 2018, Essence Company, a calendar year taxpayer, will change from using the cash method for tax

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For 2018, Essence Company, a calendar year taxpayer, will change from using the cash method for tax purposes to the accrual method. At the end of 2017, Essence had the following items:

Accounts receivable ..............................$200,000
Accounts payable ...................................135,000
Bank loan ................................................100,000

What is the § 481(a) adjustment for this change in accounting method? Be sure to state whether it is positive or negative.

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South-Western Federal Taxation 2019 Comprehensive

ISBN: 9781337703017

42th Edition

Authors: David M. Maloney, William A. Raabe, William H. Hoffman, James C. Young

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Question Posted: Jun 03, 2019 03:18 AM

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For 2018, Essence Company, a calendar year taxpayer, will change from using the cash method for tax

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When Essence changes its method of accounting it will compute a 481a ...View the full answer

South-Western Federal Taxation 2019 Comprehensive

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