User Account

All Pages

What is the nature of this gain

Assignment Help Accounting Basics
Reference no: EM132108451

Question - The client depends on you, the CPA, to provide journal entries for activity in fixed assets. While discussing fixed assets, the client divulges that he got a great deal to upgrade his laser dermatology equipment. Ultimately, you find out that $569,888 of new equipment was purchased and placed in service on 6/18/2014. Furthermore, and much after the fact, you discover that old medical equipment was sold to an unrelated party for $75,000 cash. The original cost of the equipment was $300,000 and it was fully depreciated (no Sec. 179). The cash was deposited in one of the shareholders personal accounts.

a. Provide a journal entry to calculate the gain on sale and adjust the fixed asset and accumulated depreciation accounts.

b. What is the nature of this gain?

c. Could the Dr. have structured this sale in a different way to avoid taxable income?

Reference no: EM132108451

Questions Cloud

What are the guidelines for recording pensions : What are the guidelines for recording pensions? Why is pension accounting challenging? Have there been abuses associated with this area
Deciding on the firm distribution strategy in several mark : The sales manager for Smith Exports is deciding on the firm's distribution strategy in several markets.
Examine the balance between calming external stakeholders : Examine the balance between calming external stakeholders and the ethical considerations of providing all the information that is required by the SEC
Track flight prices on most airlines : Track Flight Prices On most airlines, flights open up for sale 331 days in advance. That is the earliest you can book a flight, about 11 months in advance.
What is the nature of this gain : The client depends on you, the CPA, to provide journal entries for activity in fixed assets. What is the nature of this gain
What is the realized gain and the recognized gain : Depreciation of $7,500 had been taken on the old machine. What is the realized gain and the recognized gain, and how will any recognized gain be treated
What are you looking forward to learning more about career : Looking back over the course objectives for this course, what are you looking forward to learning more about throughout your education and career?
Maintaining profitability will help stay ahead of profit : Maintaining profitability will help stay ahead of profit revenue. This is most important because this will help seize control.
Develop a strategic plan for the same organization : Building on Assignments 1 and 2, continue to develop a strategic plan for the same organization (Note: Refer to the environmental analysis that you completed.

Reviews

Write a Review

Accounting Basics Questions & Answers

  In obtaining letters from attorneys bill milanos aim is to

in obtaining letters from attorneys bill milanos aim is to receive the letters as early as possible after the balance

  Why would someone choose to use a perpetual

Why would someone choose to use a perpetual over a period inventory system, and vice versa?

  Dring 2011 crockett incs net income was 100000 its common

during 2011 crockett inc.s net income was 100000. its common stockholders equity was 700000 at january 1 2011 and

  What is the computer equipments book value

What is the computer equipments book value on May 31 - Post the purchase of May 1 and the depreciation on May 31 to T-accounts

  Discuss conversion costs using the fifo method

Calculate the following amounts for conversion costs using the FIFO method

  Analyze the theories related to crime causation

Analyze the theories related to crime causation, the essence of crime, organizational environment conducive to crime, and ethical issues related to fraud.

  What should heather say to ed

The following discussion took place between Heather Sims, the office manager of Sedgemoor Data Company, and a new accountant, Ed Hahn.

  Tan believes that outsourcing payroll would simplify her

mary tan is the controller for duck associates a property management company in portland oregon. each year tamn and

  Original goals of reducing drug use

In your opinion, what have been among the main outcomes of the War on Drugs? How close has it come to its original goals of reducing drug use and punishing drug suppliers?

  Compute basic earnings per share for the year ended

Compute basic earnings per share (rounded to 2 decimal places) for the year ended December 31, 2013

  What activities are unique to merchandise businesses

What activities are unique to merchandise businesses? How does management account for the additional task unique to a merchandise operations

  What was the dollar cost of this fee

Management negotiated a fee (the underwriting spread) of 8 % on this transaction. What was the dollar cost of this fee

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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