Homework Answers
A) Employee parking lot will be treated as a Sec 1231 asset. It will be considered as a Sec 1231 asset for tax purposes.
B) Land held as an investment will be treated as a capital asset for tax purposes.
C) Automobile used for personal use will be treated as a Capital asset for tax purposes.
D) A truck used exclusively for trade or business purpose will be treated as Sec 1231 property for tax purposes.
E) Office building where accounting practice is located is treated as Sec 1231 property for tax purposes. And
F) A computer which is used by a sales representative only for business or office purpose will be classified as Sec 1231 property for tax purposes.
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Indicate whether each of the following assets are capital assets, Sec. 1231 assets, or ordinary income...
2 POINTS (6) Indicate whether each of the following assets are capital assets, Sec. 1231 assets, or ordinary income...
2 POINTS (6) Indicate whether each of the following assets are capital assets, Sec. 1231 assets, or ordinary income property (property which, if sold, results in ordinary income). Assume that all of the property is held for more than one year. a. XYZ Corporation owns land used as an employee parking lot. How is the parking lot classified for tax purposes? b. Montana Corporation owns land held as an investment. How is the land classified for tax purposes? c. John,...
17-26 Characterizing Assets. Indicate whether the following gains and losses are $ 1231 gains or losses...
17-26 Characterizing Assets. Indicate whether the following gains and losses are $ 1231 gains or losses or capital gains and losses or neither. Make your determination prior to the $1231 netting process. a. Printing press used in A's business; held for three years and sold at a loss. b. Goodwill sold as part of the sale of B's business. c. Vacant lot used five years as a parking lot in C's business; sold at a gain. House, 80% of which...
gains and losses are $1231 ke your determination prior PROBLEMS 17-26 Characterizing Assets. Indicate whether the...
gains and losses are $1231 ke your determination prior PROBLEMS 17-26 Characterizing Assets. Indicate whether the following gains and losse gains or losses or capital gains and losses or neither. Make your deter to the $ 1231 netting process. 2. Printing press used in A's business; held for three years and sold at a les b. Goodwill sold as part of the sale of B's business. c. Vacant lot used five years as a parking lot in C's business; sold...
1. Capital Assets. (Obj. 1) Indicate which of the following are capital assets. Item Answer a....
1. Capital Assets. (Obj. 1) Indicate which of the following are capital assets. Item Answer a. House occupied as a residence by the owner b. Delivery truck used in a contractor's business c. Corporate stocks owned by a doctor d. Valuable jewelry held for sale by Jones Jewelers e. Land held for investment by an accountant f. Automobile used for personal purposes by the owner g. Business suits worn only to work h. House used strictly as a summer residence...
Indicate to which account Trudy would debit each of the costs.
E9-2 Trudy Company incurred the following costs.1. Sales tax on factory machinery purchased $ 5,0002. Painting of and lettering on truck immediately upon purchase 7003. Installation and testing of factory machinery 2,0004. Real estate broker’s commission on land purchased 3,5005. Insurance premium paid for first year’s insurance on new truck 8806. Cost of landscaping on property purchased 7,2007. Cost of paving parking lot for new building constructed 17,9008. Cost of clearing, draining, and filling land 13,3009. Architect’s fees on self-constructed...
Required information Convers Corporation (calendar-year-end) acquired the following assets during the current tax year: (ignore $179...
Required information Convers Corporation (calendar-year-end) acquired the following assets during the current tax year: (ignore $179 expense and bonus depreciation for this problem): (Use MACRS Table 1. Table 2 and Table 5.) Asset Machinery Computer equipment Used delivery truck Furniture Total Date Placed in Service October 25 February 3 March 17 April 22 Original Basis $ 72,000 $ 12,000 $ 25,000 $152,000 $ 261,000 *The delivery truck is not a luxury automobile. In addition to these assets, Convers installed new...
Convers Corporation (calendar-year-end) acquired the following assets during the current tax year: (ignore §179 expense and bonus depreciation for this problem): (Use MACRS Table 1, Table 2, and Table...
Convers Corporation (calendar-year-end) acquired the following assets during the current tax year: (ignore §179 expense and bonus depreciation for this problem): (Use MACRS Table 1, Table 2, and Table 5.) Date Placed Original Asset in Service Basis Machinery 25-Oct $ 78,000 Computer equipment 03-Feb $ 18,000 Used delivery truck* 17-Mar $ 31,000 Furniture 22-Apr $ 158,000 Total $ 285,000 *The delivery truck is not a luxury automobile. In addition to these assets, Convers installed new flooring (qualified improvement property) to...
Benedict Company incurred the following costs. Indicate to which account Benedict would debit each of the...
Benedict Company incurred the following costs. Indicate to which
account Benedict would debit each of the costs.
No.
Transactions
Account
1.
Sales tax on factory
machinery purchased
$ 5,000
select one from the following: Insurance Expense or Land or
Buildings or Equipment or Architect’s Fees or Tax Expense or
Repairs and Maintenance Expense or Advertising Expense or Land
Improvements or Prepaid Insurance
2.
Painting of and lettering on
truck immediately upon purchase
700
select
one from the following: Insurance Expense...
A and B each own an undivided one-half interest in a tract of raw land. In...
A and B each own an undivided one-half interest in a tract of raw land. In discussing each of the following cumulative facts, determine how the opera- tion should be classified for tax purposes and the availability, if any, of elect- ing out under s761(a). Would it make any difference if A and B each owned individually a part of the tract instead of each owning an undivided interest in the whole? A and B constructed a parking lot on...
Required information Problem 10-54 (LO 10-2, LO 10-3) Convers Corporation (calendar-year-end) acquired the following assets during...
Required information Problem 10-54 (LO 10-2, LO 10-3) Convers Corporation (calendar-year-end) acquired the following assets during the current tax year: (ignore $179 expense and bonus depreciation for this problem): (Use MACRS Table 1, Table2, and Table 5.) Asset Machinery Computer equipment Used delivery truck* Furniture Total Date Placed in Service October 25 February 3 March 17 April 22 Original Basis $ 104,000 $ 44,000 $ 57,000 $184,000 $ 389,000 *The delivery truck is not a luxury automobile. In addition to...
2 POINTS (6) Indicate whether each of the following assets are capital assets, Sec. 1231 assets, or ordinary income property (property which, if sold, results in ordinary income). Assume that all of the property is held for more than one year. a. XYZ Corporation owns land used as an employee parking lot. How is the parking lot classified for tax purposes? b. Montana Corporation owns land held as an investment. How is the land classified for tax purposes? c. John,...
17-26 Characterizing Assets. Indicate whether the following gains and losses are $ 1231 gains or losses or capital gains and losses or neither. Make your determination prior to the $1231 netting process. a. Printing press used in A's business; held for three years and sold at a loss. b. Goodwill sold as part of the sale of B's business. c. Vacant lot used five years as a parking lot in C's business; sold at a gain. House, 80% of which...
gains and losses are $1231 ke your determination prior PROBLEMS 17-26 Characterizing Assets. Indicate whether the following gains and losse gains or losses or capital gains and losses or neither. Make your deter to the $ 1231 netting process. 2. Printing press used in A's business; held for three years and sold at a les b. Goodwill sold as part of the sale of B's business. c. Vacant lot used five years as a parking lot in C's business; sold...
1. Capital Assets. (Obj. 1) Indicate which of the following are capital assets. Item Answer a. House occupied as a residence by the owner b. Delivery truck used in a contractor's business c. Corporate stocks owned by a doctor d. Valuable jewelry held for sale by Jones Jewelers e. Land held for investment by an accountant f. Automobile used for personal purposes by the owner g. Business suits worn only to work h. House used strictly as a summer residence...
Required information Convers Corporation (calendar-year-end) acquired the following assets during the current tax year: (ignore $179 expense and bonus depreciation for this problem): (Use MACRS Table 1. Table 2 and Table 5.) Asset Machinery Computer equipment Used delivery truck Furniture Total Date Placed in Service October 25 February 3 March 17 April 22 Original Basis $ 72,000 $ 12,000 $ 25,000 $152,000 $ 261,000 *The delivery truck is not a luxury automobile. In addition to these assets, Convers installed new...
Benedict Company incurred the following costs. Indicate to which
account Benedict would debit each of the costs.
No.
Transactions
Account
1.
Sales tax on factory
machinery purchased
$ 5,000
select one from the following: Insurance Expense or Land or
Buildings or Equipment or Architect’s Fees or Tax Expense or
Repairs and Maintenance Expense or Advertising Expense or Land
Improvements or Prepaid Insurance
2.
Painting of and lettering on
truck immediately upon purchase
700
select
one from the following: Insurance Expense...
A and B each own an undivided one-half interest in a tract of raw land. In discussing each of the following cumulative facts, determine how the opera- tion should be classified for tax purposes and the availability, if any, of elect- ing out under s761(a). Would it make any difference if A and B each owned individually a part of the tract instead of each owning an undivided interest in the whole? A and B constructed a parking lot on...
Required information Problem 10-54 (LO 10-2, LO 10-3) Convers Corporation (calendar-year-end) acquired the following assets during the current tax year: (ignore $179 expense and bonus depreciation for this problem): (Use MACRS Table 1, Table2, and Table 5.) Asset Machinery Computer equipment Used delivery truck* Furniture Total Date Placed in Service October 25 February 3 March 17 April 22 Original Basis $ 104,000 $ 44,000 $ 57,000 $184,000 $ 389,000 *The delivery truck is not a luxury automobile. In addition to...
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