The basis of cost recovery property must be reduced by at least the cost recovery allowable.
Answer the following statement true (T) or false (F)
True
Rationale: The basis of cost recovery property must be reduced by the cost recovery allowed but not less than the cost recovery allowable.
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Krech Corporation's comparative balance sheet appears below:Comparative Balance Sheet Ending BalanceBeginning BalanceAssets: Current assets: Cash and cash equivalents$31,000 $28,000 Accounts receivable 18,000 20,000 Inventory 58,000 56,000 Prepaid expenses 12,000 10,000 Total current assets 119,000 114,000 Property, plant, and equipment 374,000 354,000 Less accumulated depreciation 190,000 165,000 Net property, plant, and equipment 184,000 189,000 Total assets$ 303,000 $ 303,000 Liabilities and stockholders' equity: Current liabilities: Accounts payable$13,000 $9,000 Accrued liabilities 52,000 53,000 Income taxes payable 67,000 69,000 Total current
liabilities 132,000 131,000 Bonds payable 76,000 73,000 Total liabilities 208,000 204,000 Stockholders' equity: Common stock 28,000 26,000 Retained earnings 67,000 73,000 Total stockholders' equity 95,000 99,000 Total liabilities and stockholders' equity$ 303,000 $ 303,000 The company's net income (loss) for the year was ($3,000) and its cash dividends were $3,000. It did not sell or retire any property, plant, and equipment during the year. The company uses the indirect method to determine the net cash provided by operating activities.Which of the following is correct regarding the operating activities section of the statement of cash flows? A. The change in Prepaid Expenses will be added to net income; The change in Income Taxes Payable will be subtracted from net income B. The change in Prepaid Expenses will be subtracted from net income; The change in Income Taxes Payable will be added to net income C. The change in Prepaid Expenses will be subtracted from net income; The change in Income Taxes Payable will be subtracted from net income D. The change in Prepaid Expenses will be added to net income; The change in Income Taxes Payable will be added to net income
There is no limit on the URLTA on the amount of security deposit or prepaid rent that the landlord can charge
Indicate whether the statement is true or false
Skeen Company paid $90,000 for tangible personalty three years ago and elected to expense and deduct the cost under Section 179. This year, Skeen sold the personalty for $52,700. Accumulated book depreciation through date of sale was $31,000. What is the effect of the sale on Skeen's book income and taxable income?
A. $6,300 book and tax gain B. $6,300 book loss; -0- tax gain C. $6,300 book loss: $52,700 tax gain D. None of the above
Which of the following is a true statement regarding primary authority of tax law?
A) Articles in The Journal of Taxation are viewed as primary authority. B) Primary authority includes the Code, as well as administrative and judicial interpretations. C) The Bloomberg BNA Daily Tax Reporter is a source of primary tax authority. D) Tax services are sources of primary tax authority.