Ayayai, Inc. has identifiable assets with a total fair value of $6,019,000 and liabilities of $3,721,000. The assets include equipment with a fair value approximating book value, buildings with a fair value 25% higher than book value, and land fair value 50% higher than book value. The remaining lives of the assets are deemed to be approximately equal to thos by Ayayai, Inc. Ayayai, Inc.'s pretax incomes for the years 2020 through 2022 were $471,300, $573,100, and $374,600, respectively. Wildhorse believes that an average of these earnings represents a fair estimate of annual earnings for the indefinite fu However, it may need to consider adjustments for the following items included in pretax earnings:

Ayayai, Inc. has identifiable assets with a total fair value of $6,019,000 and liabilities of $3,721,000. The assets include equipment with a fair value approximating book value, buildings with a fair value 25% higher than book value, and land fair value 50% higher than book value. The remaining lives of the assets are deemed to be approximately equal to thos by Ayayai, Inc. Ayayai, Inc.'s pretax incomes for the years 2020 through 2022 were $471,300, $573,100, and $374,600, respectively. Wildhorse believes that an average of these earnings represents a fair estimate of annual earnings for the indefinite fu However, it may need to consider adjustments for the following items included in pretax earnings:

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter5: Business Deductions

Section: Chapter Questions

Problem 49P

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