The cost recovery deduction

Assignment Help Financial Accounting
Reference no: EM13794761

On November 4, 2012, Blue Company acquired an asset (27.5-year residential real property) for $200,000 for use in its business. In 2012 and 2013, respectively, Blue took $642 and $5,128 of cost recovery. These amounts were incorrect; Blue applied the wrong percentages (i.e., those for 39-year rather than 27.5-year assets). Blue should have taken $910 and $7,272 cost recovery in 2012 and 2013, respectively. On January 1, 2014, the asset was sold for $180,000.

a.   The adjusted basis of the asset at the end of 2013 is $.

b.   The cost recovery deduction for 2014 is $.

 

c.   The Select loss gain Item 3 on the sale of the asset in 2014 is $.

Reference no: EM13794761

Questions Cloud

Outstanding shares affect the tax treatment of tender offer : In a tender offer, Alpha Corporation wants to exchange its voting common stock for all of Theta Corporation's single class of stock. Only 85% of Theta's shareholder agrees to tender their shares. After the tender, what options exist for Alpha to requ..
What is the present value of her winnings : Sally has just won the million-dollar Big Slam jackpot at a gambling casino. The casino will pay her $55,000 per year for 12 years as the payoff. If Sally can invest money at a 11% rate of return, what is the present value of her winnings?
The adjusted trial balance is prepared : The adjusted trial balance is prepared...
The cost recovery deduction : On November 4, 2012, Blue Company acquired an asset (27.5-year residential real property) for $200,000 for use in its business. In 2012 and 2013, respectively, Blue took $642 and $5,128 of cost recovery. These amounts were incorrect; Blue applied the..
The lowest boiling point : 1. A gas occupies 30. L at 2.0 atm pressure and 27°C, How many moles of gas are present in the sample? 2. Which of the following should have the lowest boiling point?
Expenses should be matched with revenues : The matching principle states that expenses should be matched with revenues. Another way of stating him principle is to say that...
Failure to prepare an adjusting entry at the end of period : Failure to prepare an adjusting entry at the end of the period to record an accrued expense would cause
Cumulative effect of changing the estimated bad debt rate : Vandross Company has recorded bad debt expense in the past at a rate of 1.5% of net sales. In 2014, Vandross decides to increase its estimate to 2%. If the new rate had been used in prior years, cumulative bad debt expense would have been $390,430 in..

Reviews

Write a Review

Financial Accounting Questions & Answers

  What should hess record as gain on retirement

Hess uses straight-line amortization. On March 1, 2011, Hess retired $400,000 of these bonds at 98 plus accrued interest. What should Hess record as a gain on retirement of these bonds? Ingore taxes.

  Prepare current liability section of red banks balance sheet

Prepare journal entries to record the transactions and prepare adjusting entries on October 31 to record accrued interest.

  Calculate the gross margin percentage

Identify the major components of stockholders' equity by examining the Statement of Stockholders Equity. What types of accounts and transaction resulted in major changes in the Stockholder Equity accounts during the most recent year?

  Explain citing the legal principles involved

Is the University discharged from its obligation of performancce? Is professor Glass discharged from his obligation of performance? Explain, citing the legal principles involved.

  Classify the lease as a finance lease or operating lease

Classify the lease as a finance lease or operating lease, and justify your answer.

  Incurred cost

Brown Company incurred cost of $17000 for material, $13000 for labor, and $16000 for factory overhead. There was no beginning or ending work in process.

  Break-even sales-sales for target profit

Health-Temp Company is a placement agency for temporary nurses. It serves hospitals and clinics throughout the metropolitan area. Health-Temp Company believes it will place temporary nurses for a total of 23,500 hours next year.

  Calculation of accumulated depreciationthe capital company

calculation of accumulated depreciation.the capital company purchased 3 machines in the past year. information

  Does the company have any contingent liabilities

What are the amounts and descriptions of the company's current liabilities for the most recent year? Does the company have any contingent liabilities? If yes, please describe. What are the three categories of contingent liabilities and the treatment ..

  Principles require that the inventory of a company

Generally accepted accounting principles require that the inventory of a company be reported at:

  Classifying cash flows-cash from operating activities

Classifying Cash Flows- Compute cash from operating activities. Compute cash from investing activities. Compute cash from financing activities.

  What amount would be shown in the december

what amount would be shown in the december 31, 2009 financial statement for realized gross profit on 2008 installment sales, and deferred gross profit on 2008 installment sales, respectively?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd