Required: a. Compute Sigma's taxable income assuming that it used the straight-line method to calculate depreciation on the building and has no nonrecaptured Section 1231 losses. b. Recompute taxable income assuming that Sigma sold the securities for $159,200 rather than $75,000.
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- Oz Corporation has the following assets at year-end: Patents (net), 26,000; Land, 50,000; Buildings, 175,000; Accumulated Depreciation: Buildings, 57,500; Investment in Held-to-Maturity Bonds, 12,000; Equipment, 95,000; and Accumulated Depreciation: Equipment, 25,000. Prepare the property, plant, and equipment section of Ozs year-end balance sheet.This year, Sigma Incorporated generated $686,250 income from its routine business operations. In addition, the corporation sold the following assets, all of which were held for more than 12 months: Initial Basis Accumulated Depreciation* Sale Price Marketable securities $ 144,400 $ 0 $ 72,950 Production equipment 101,200 80,960 41,000 Business realty: Land 215,250 0 218,250 Building 288,000 86,400 263,000 *Through date of sale. Required: Compute Sigma’s taxable income assuming that it used the straight-line method to calculate depreciation on the building and has no nonrecaptured Section 1231 losses. Recompute taxable income assuming that Sigma sold the securities for $154,800 rather than $72,950EzTech, a calendar year accrual basis corporation, generated $994,300 ordinary income from its business this year. It also sold the following assets, all of which were held for more than 12 months: Machinery Office equipment Warehouse Investment securities Investment land Accumulated Initial Basis Depreciation* $ 97,500 $ 39,660 50,000 12,470 163,500 21,620 72.700 n/a 350,000 n/a Sale Price $ 70,000 57,500 125,000 83,100 328,000 *Through date of sale. EzTech used the straight-line method to calculate depreciation on the warehouse and has no nonrecaptured Section 1231 losses. Required: a. Compute EzTech's taxable income. b. Recompute taxable income assuming that EzTech used the land in its business instead of holding it for investment.
- This year, Sigma, Incorporated generated $612,000 income from its routine business operations. In addition, the corporation sold the following assets, all of which were held for more than 12 months: Marketable securities Production equipment Business realty: Land Building Initial Basis $ 144,000 93,000 165,000 200,000 Accumulated Depreciation* $0 76,000 0 58,300 Sale Price $ 64,000 30,000 180,000 210,000 *Through date of sale. Required: a. Compute Sigma’s taxable income assuming that it used the straight-line method to calculate depreciation on the building and has no nonrecaptured Section 1231 losses. b. Recompute taxable income assuming that Sigma sold the securities for $150,000 rather than $64,000.This year, Sigma, Incorporated generated $612,000 income from its routine businessoperations. In addition, the corporation sold the following assets, all of which wereheld for more than 12 months:Initial BasisAccumulatedDepreciation* Sale PriceMarketable securities $ 144,000 $ 0 $ 64,000Production equipment 93,000 76,000 30,000Business realty:Land 165,000 0 180,000Building 200,000 58,300 210,000*Through date of sale.Required:a. Compute Sigma’s taxable income assuming that it used the straight-line method tocalculate depreciation on the building and has no nonrecaptured Section 1231losses.b. Recompute taxable income assuming that Sigma sold the securities for $150,000rather than $64,000.This year, Sigma, Incorporated generated $637,500 income from its routine business operations. In addition, the corporation sold the following assets, all of which were held for more than 12 months: Initial Basis $ 165,200 110,800 Accumulated Depreciation $0 88,640 223,500 206,000 Marketable securities Production equipment Business realty: Land Building. "Through date of sale. Required: a. Compute Sigma's taxable income assuming that it used the straight-line method to calculate depreciation on the building and has no nonrecaptured Section 1231 losses. b. Recompute taxable income assuming that Sigma sold the securities for $169,400 rather than $73,750. Complete this question by entering your answers in the tabs below. Sale Price $ 73,750 38,000 0 61,800 236,750 231,000 Required A Required B Compute Sigma's taxable income assuming that it used the straight-line method to calculate depreciation on the building and has no nonrecaptured Section 1231 losses. Taxable income
- his year, Sigma, Incorporated generated $656,000 income from its routine business operations. In addition, the corporation sold the following assets, all of which were held for more than 12 months: Initial Basis Accumulated Depreciation* Sale Price Marketable securities $ 182,000 $ 0 $ 64,500 Production equipment 96,800 77,440 50,750 Business realty: Land 214,500 0 234,250 Building 248,000 74,400 243,000 *Through date of sale. Required: Compute Sigma’s taxable income assuming that it used the straight-line method to calculate depreciation on the building and has no nonrecaptured Section 1231 losses.In its first year, Firm KZ recognized $427,300 ordinary business income and a $13,590 loss on the sale of an investment asset. In its second year, Firm KZ recognized $500,800 ordinary business income, a $19,300 Section 1231 gain, and a $7,400 Section 1231 loss on two sales of operating assets. * I only need Requirement D to be solved. Required: d. Compute KZ's deferred tax asset or liability (identify which) on its balance sheet on the last day of the second year.In its first year, Firm KZ recognized $457,500 ordinary business income and a $13,250 loss on the sale of an investment asset. In its second year, Firm KZ recognized $518,000 ordinary business income, a $20,350 Section 1231 gain, and a $8,070 Section 1231 loss on two sales of operating assets. Required: a. Compute KZ's book and taxable income for its first year. b. Using a 21 percent tax rate, compute KZ's deferred tax asset or liability (identify which) on its balance sheet on the last day of the year. c. Compute KZ's book and taxable income for its second year. d. Compute KZ's deferred tax asset or liability (identify which) on its balance sheet on the last day of the second year. Answer is not complete. Complete this question by entering your answers in the tabs below. Req A and B Req C and D c. Compute KZ's book and taxable income for its second year. d. Compute KZ's deferred tax asset or liability (identify which) on its balance sheet on the last day of the second year. Note:…
- 7. JBC purchased an ongoing business for P10,000,000 cash. The assets and liabilities of the acquired business measured at fair value are: Cash Accounts Receivable Inventory Land Plant and equipment Accounts Payable Bonds Payable 525,000 c. P 625,000 d. P 400,000 2,075,000 2,500,000 4,125,000 6,065,000 (895,000) What is the amount of gain on bargain purchase? a. P 500,000 b. P 550,000 (3,895,000)Account MNO Corporation had the following information regarding its fixed assets: Beginning of the year: $500,000Additions during the year: $100,000Disposals during the year: $50,000Accumulated depreciation at the beginning of the year: $200,000Depreciation expense for the year: $50,000Calculate the net book value of fixed assets at the end of the year.In year 1, Firm A paid $49,000 cash to purchase a tangible business asset. In year 1 and year 2, it deducted $3,040 and $6,600 depreciation with respect to the asset. Firm A's marginal tax rate in both years was 21 percent. Required: a. Compute Firm A's net cash flow attributable to the asset purchase in each year. b. Compute Firm A's adjusted basis in the asset at the end of each year. Complete this question by entering your answers in the tabs below. Required A Required B Compute Firm A's net cash flow attributable to the asset purchase in each year. Note: Cash outflows should be indicated by a minus sign. Round your intermediate calculations and final answers to nearest whole dollar amount. Before-tax cash flows Tax (cost) or savings Net cash flow Year 1 Year 2