For 2019, Essence Company, a calendar year taxpayer, will change from using the cash method for tax

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For 2019, Essence Company, a calendar year taxpayer, will change from using the cash method for tax purposes to the accrual method. At the end of 2018, Essence showed 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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Related Book For answer-question

South-Western Federal Taxation 2020 Comprehensive

ISBN: 9780357109144

43rd Edition

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

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Question Posted: Sep 19, 2019 12:04 PM

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For 2019, 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 2020 Comprehensive

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