The TK Partnership has two assets: $20,000 cash and a machine having a $28,000 basis and a $40,000 FMV. The partnership has claimed $16,000 in depreciation on the machine since its purchase. If the machine is sold for its FMV, would TK Partnership have an unrealized receivable item?
What will be an ideal response?
Yes. All of the $12,000 gain would be an unrealized receivable, since it is recaptured under Sec. 1245. Primary examples of unrealized receivables are the potential ordinary income recapture items like Sec. 1245 or Sec. 1250.
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On the income statement in the single-step form, the total of all expenses is deducted from the total of all revenues
Indicate whether the statement is true or false
Which type of retailer has a high proportion of merchandise space to selling space?
a. full-service specialty store b. supermarket c. warehouse store d. gas station
Which one of the following would NOT be typical of the fragmentation perspective of organizational culture?
a. Culture defragments people into a unified, strong culture b. Culture promotes ambiguity which provides a protective shroud from the meaninglessness of everyday organizational life c. Culture is never consistent nor clearly contested, it forms around certain emergent issues and then dissolves as people regulate their position within cultural spaces created for and around them d. All of the above
Grant Manufacturing is considering investing in equipment that costs $70,000. The equipment would be depreciated using the straight-line method with no half-year convention over seven years and have no salvage value. If the company has a 40 percent income tax rate and desires an after-tax rate of return of 14 percent on investments, the total present value of the depreciation tax shield is:
A) $42,883. B) $27,972. C) $25,730. D) $17,153.