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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Keating Co. is considering disposing of equipment with a cost of $74,000 and accumulated depreciation of $51,800. Keating Co. can sell the equipment
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Ayayai Automotive is looking to expand its operations and has approached Dynatech Garage to acquire its business.
Dynatech has agreed to sell if Ayayai assumes the mortgage on Dynatech's building as part of the sale. The fair value of
Dynatech's identifiable assets and identifiable liabilities are: Inventory: 149000. Buildings: 949000. Land: 349000.
Mortage payable (274000). Net identifiable assets: 1,173,000. Assuming Ayayai purchases the business for $Record
the journal entry for the purchase by Ayayai Automotive. (If no entry is required, select "No entry" for the account titles
and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent
manually. List all debit entries before credit entries.) Account Titles Debit Credit 1,324,000
Keating Co. is considering disposing of equipment with a cost of $66,000 and accumulated depreciation of $46,200. Keating Co. can sell the equipment through a broker for $32,000, less a 5% broker commission. Alternatively, Gunner Co. has offered to lease the equipment for five years for a total of $45,000. Keating will incur repair, insurance, and property tax expenses estimated at $9,000 over the five-year period. At lease-end, the equipment is expected to have no residual value. The net differential income from the lease alternative is
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Loose Leaf for McGraw-Hill's Taxation of Individuals and Business Entities 2019 Edition
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