Newsman Co made the following errors in counting its year-end physical inventories: 2012 .................................. $ 60,000 overstatement 2013 .................................. 108,000 understatement 2014 .................................. 90,000 overstatement As a result of the above undetected errors, 2014 income was
a. understated by $18,000.
b. overstated by $198,000.
c. overstated by $18,000.
d. understated by $198,000.
B
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What will be an ideal response?
The term ________ is often used to describe the common U.S. business practice of focusing on short-term results from low-risk projects via analysis by NPV or IRR calculations
Fill in the blanks with correct word
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Answer the following statement true (T) or false (F)
Rob sells stock with a cost of $3,000 to his daughter for $2,200, which is its fair market value. Later the daughter sells the stock for $3,200 to an unrelated party. Which of the following describes the tax treatment to Rob and Daughter?
A.
| Rob | Daughter |
| Recognizes no loss | Recognizes gain of $1,000 |
B.
| Rob | Daughter |
| Recognizes $800 loss | Recognizes gain of $1,000 |
C.
| Rob | Daughter |
| Recognizes no loss | Recognizes gain of $200 |
D.
| Rob | Daughter |
| Recognizes $800 loss | Recognizes gain of $200 |