Loose Leaf for McGraw-Hill's Taxation of Individuals and Business Entities 2019 Edition
10th Edition
ISBN: 9781260189728
Author: Brian C. Spilker Professor, Benjamin C. Ayers, John Robinson Professor, Edmund Outslay Professor, Ronald G. Worsham Associate Professor, John A. Barrick Assistant Professor, Connie Weaver
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 10, Problem 7DQ
Graber Corporation runs a long-haul trucking business. Graber incurs the following expenses: replacement tires, oil changes, and a transmission overhaul. Which of these expenditures may be deducted currently and which must be capitalized? Explain.
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Magilke Industries acquired equipment this year to be used in its operations. The equipment was delivered by the suppliers, installed by Magilke, and placed into operation. Some of it was purchased for cash with discountsavailable for prompt payment. Some of it was purchased under long-term payment plans for which the interest charges approximated prevailing rates. What costs should Magilke capitalize for the new equipment purchased this year? Explain.
Assume that Sohar Aluminium Company purchased a machinery for OMR 2000 and spent OMR200 for its transportation. In addition they paid tax OMR 450 during purchase, Transportation cost OMR 100, Insurance during transportation OMR 50, and Assembling charges OMR 100, installation and testing charges OMR 250. After transportation and installation, the company also paid the insurance premium of OMR 50 to cover the future loss from the machinery due to accidents and breakdowns. Compute the cost of the machinery.
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c. OMR3100
d. OMR3150
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a.The cost of a hunting camp used to entertain customers.
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d.The dues of a racquet club used to keep in shape.
e.None of these choices are deductible.
Chapter 10 Solutions
Loose Leaf for McGraw-Hill's Taxation of Individuals and Business Entities 2019 Edition
Ch. 10 - Explain why certain long-lived assets are...Ch. 10 - Prob. 2DQCh. 10 - Explain the similarities and dissimilarities...Ch. 10 - Is an assets initial or cost basis simply its...Ch. 10 - Prob. 5DQCh. 10 - Explain why the expenses incurred to get an asset...Ch. 10 - Graber Corporation runs a long-haul trucking...Ch. 10 - What depreciation methods are available for...Ch. 10 - If a business places several different assets in...Ch. 10 - Prob. 38P
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