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- Which of the following statements with respect to the depreciation of property under MACRS is incorrect? Under the half-year convention, one-half year of depreciation is allowed in the year the property is placed in service. If a taxpayer elects to use the straight-line method of depreciation for property in the 5 -year class, all other 5 -year class property acquired during the year must also be depreciated using the straight-line method. In some cases, when a taxpayer places a significant amount of property in service during the last quarter of the year, real property must be depreciated using a mid-quarter convention. Real property acquired after 1986 must be depreciated using the straight-line method. The cost of property to which the MACRS rate is applied is not reduced for estimated salvage value.Choose the correct. Niceville Company pays property taxes of $100,000 in the second quarter of the year. Which of the following statements is true with respect to the recognition of property tax expense in interim financial statements?a. Under U.S. GAAP, the company would report property tax expense of $100,000 in the second quarter of the year.b. Under IFRS, the company would report property tax expense of $100,000 in the second quarter of the year.c. Under U.S. GAAP, the company would report property tax expense of $33,333 in each of the second, third, and fourth quarters of the year.d. Under IFRS, the company would report property tax expense of $25,000 in the first quarter of the year.Holt Co. discovered that in the prior year, it failed to report P40,000 of depreciation related to a newly constructed building. The depreciation was computed correctly for tax purposes. The tax rate for the current year was 20%. How should Holt report the correction in the error in the current year -as an increase in accumulated depreciation of P40,000 -as an increase of depreciation expense of P40,000 -as an increase in depreciation expense of P32,000 -as an increase in accumulated depreciation of P32,000
- Which of the following statements is true for real rental property that has been depreciated using the mid-month convention in the year of disposition? (a) The depreciation in the year of disposition will be the same as the depreciation in a regular year. (b) The deductible amount will be half the depreciation determined for the full year. (c) The deductible amount will be determined by the month in which the asset is disposed. (d) Using information from the MACRS percentage tables, the calculation is made based on a short tax year.If a depreciable property is revalued at the middle of the current year, how is the depreciation expense for the year determined when the entity has a calendar year-end? a.Depreciation for the first half of the year is based on cost and for the second half on revalued amount. b.Depreciation for the year is based on the average of the depreciation based on cost and on revalued amount. c.Depreciation for the entire year is based on revalued amount. d.Depreciation for the entire year is based on cost.Loss is generally considered a tax relief and can be carried forward to the following trading year and offset against the profit for that year. A company operating in Country A with the following tax loss rules. i. There is no cap on the number of years for which losses may be carried forward. ii. There is no cap is applicable for the first five years of assessment next following the year of assessment in which the taxpayers started a trade, business, or profession. iii. There is no cap available where a taxpayer (whether individual or company) whose gross turnover is below $10,000,000 per annum. iv. The deduction allowed for prior year losses (PYL) is 50 percent of the net income for the respective year. In 2022, ABC Limited, a company registered in Country A, had a trading profit of $3,000,000. The company started business in 1997 and its gross revenue was $15,000,000 for the tax year. Prior year tax losses are $4,000,000. It’s loss relief for that year is. a. $1,500,000…
- Loss is generally considered a tax relief and can be carried forward to the following trading year and offset against the profit for that year. A company operating in Country A with the following tax loss rules. i. There is no cap on the number of years for which losses may be carried forward. ii. There is no cap applicable for the first five years of assessment following the year of assessment in which the taxpayers started a trade, business, or profession. iii. There is no cap available where a taxpayer (whether individual or company) whose gross turnover is below $10,000,000 per annum. iv. The deduction allowed for prior year losses (PYL) is 50 percent of the net income for the respective year. In 2022, LMP Limited, a company registered in Country A, had a trading profit of $5,000,000. The company started business in 2020 and its gross revenue was $9,000,000 for the tax year. Prior year tax losses are $4,000,000. It’s loss relief for that year is? a. $3,000,000 b.…Loss is generally considered a tax relief and can be carried forward to the following trading year and offset against the profit for that year. A company operating in Country A with the following tax loss rules. i. There is no cap on the number of years for which losses may be carried forward. ii. There is no cap applicable for the first five years of assessment following the year of assessment in which the taxpayers started a trade, business, or profession iii. There is no cap available where a taxpayer (whether individual or company) whose gross turnover is below $10,000,000 per annum. iv. The deduction allowed for prior year losses (PYL) is 50 percent of the net income for the respective year. In 2022, XYZ Limited, a company registered in Country A, had a trading profit of $5,000,000. The company started business in 1997 and its gross revenue was $25,000,000 for the tax year. Prior year tax losses are $2,000,000. It's loss relief for that year is? a.$2,500,000 b.$1,000,000…Loss is generally considered a tax relief and can be carried forward to the following trading year and offset against the profit for that year. A company operating in Country A with the following tax loss rules. i. There is no cap on the number of years for which losses may be carried forward. ii. There is no cap applicable for the first five years of assessment following the year of assessment in which the taxpayers started a trade, business, or profession. iii. There is no cap available where a taxpayer (whether individual or company) whose gross turnover is below $10,000,000 per annum. iv. The deduction allowed for prior year losses (PYL) is 50 percent of the net income for the respective year. In 2022, LMP Limited, a company registered in Country A, had a trading profit of $5,000,000. The company started business in 2020 and its gross revenue was $9,000,000 for the tax year. Prior year tax losses are $4,000,000. It's loss relief for that year is? а. $2,500,000 b.$4,000,000…
- Niceville Company pays property taxes of $100,000 in the second quarter of the year. Which of the following statements is true with respect to the recognition of property tax expense in interim financial statements?a. Under U.S. GAAP, the company would report property tax expense of $100,000 in the second quarter of the year.b. Under IFRS, the company would report property tax expense of $100,000 in the second quarter of the year.c. Under U.S. GAAP, the company would report property tax expense of $33,333 in each of the second, third, and fourth quarters of the year.d. Under IFRS, the company would report property tax expense of $25,000 in the first quarter of the year.Which of the following statements are TRUE? a. MACRS-GDS uses a half-year convention, whereas MACRS-ADS does not. b. The half-year convention has the effect of depreciating over n − 1 full years (2, 3, . . . , n), and two half-years (1 and n + 1). c. The investment’s property class establishes the number of years over which the cost basis is to be recovered (depreciated). d. In general, MACRS-GDS has a longer recovery period (depreciation period) than MACRS-ADS.Miller Co. discovered that in the prior year, it failed to report $40,000 of depreciation related to a newly constructed building. The depreciation was computed correctly for tax purposes. The tax rate for the current year was 40%. What was the impact of the error on Miller’s financial statements for the prior year? Understatement of net income of $24,000. Understatement of accumulated depreciation of $40,000. Understatement of depreciation expense of $24,000. Understatement of accumulated depreciation of $24,000.