Dender Company sold business equipment with a $386,000 initial cost basis and $171,000 accumulated tax depreciation. Compute Dender's recaptured ordinary income and Section 1231 gain or loss recognized if the amount realized on sale was: a. $200,000 b. $300,000 c. $400,000
What will be an ideal response?
a. Dender recognizes a $15,000 Section 1231 loss ($200,000 amount realized ? $215,000 adjusted basis).
b. Dender recognizes $85,000 recaptured ordinary income ($300,000 amount realized ? $215,000 adjusted basis).
c. Dender recognizes $171,000 recaptured ordinary income (equal to accumulated depreciation) and a $14,000 Section 1231 gain ($400,000 amount realized ? $215,000 adjusted basis ? $171,000 ordinary income).
You might also like to view...
Which of the following takes place during the product definition phase?
A) generating new product ideas B) translating concepts into actual products for further testing C) reducing the concepts under consideration to a manageable number D) quantitatively assessing demand for the concept
Answer the following statements true (T) or false (F)
1. The rights approach of ethical decision-making fosters decisions made on moral principles that infringe as little as possible on the entitlements of others. 2. The justice approach of ethical decision-making focuses on taking action that results in the greater good for the majority of people. 3. Leaders more often feel a sense of loyalty to employees rather than shareholders. 4. According to the 2017 Edelman Trust Barometer, the majority of people consider CEOs to be credible. 5. In a 2015 Neilson survey, almost two thirds of consumers said that they would pay for more sustainable products.
The Taylor Company uses a process costing system. Assume that direct materials are added at the beginning of the period and that direct labor and overhead are added continuously throughout the process. The company uses the FIFO costing method. The following data are available for one of its accounting periods Units Beginning work in process 26,000 (70 percent complete for conversion costs) Units
started 180,000 Units transferred out 191,000 Ending work in process 15,000 (60 percent complete for conversion costs) Equivalent units for conversion costs of Taylor Company are A) 207,800. B) 192,200. C) 181,800. D) 200,000.
While horizontal analysis examines one item over many time periods, vertical analysis examines many items in the same interval of time.
Answer the following statement true (T) or false (F)