Preview

Generally Accepted Accounting Principles and Tax Basis

Good Essays
Open Document
Open Document
1122 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Generally Accepted Accounting Principles and Tax Basis
f';fa;d'a;f',af;ag';sdagl.;gdlal,g;adl,g,gal;am,dblv .cv z,vz mld;,ag,a;es'g.;'gad;a';ldg;gd;sal;,ger'fa,s.a;l,gdlag,dla,g;ewlwetp;lq4pewql,e;et,q;g,al,gal;g,dla;ew,tqleg,algm,eksgtmaq;,;'.E'S.AFD;Af?D/A>;T',;L,EL;On January 1, 2010, Ameen Company purchased a building for $36 million. Ameen uses straight-line depreciation for financial statement reporting and MACRS for income tax reporting. At December 31, 2012, the carrying value of the building was $30 million and its tax basis was $20 million. At December 31, 2013, the carrying value of the building was $28 million and its tax basis was $13 million. There were no other temporary differences and no permanent differences. Pretax accounting income for 2013 was $45 million.On January 1, 2010, Ameen Company purchased a building for $36 million. Ameen uses straight-line depreciation for financial statement reporting and MACRS for income tax reporting. At December 31, 2012, the carrying value of the building was $30 million and its tax basis was $20 million. At December 31, 2013, the carrying value of the building was $28 million and its tax basis was $13 million. There were no other temporary differences and no permanent differences. Pretax accounting income for 2013 was $45 million.On January 1, 2010, Ameen Company purchased a building for $36 million. Ameen uses straight-line depreciation for financial statement reporting and MACRS for income tax reporting. At December 31, 2012, the carrying value of the building was $30 million and its tax basis was $20 million. At December 31, 2013, the carrying value of the building was $28 million and its tax basis was $13 million. There were no other temporary differences and no permanent differences. Pretax accounting income for 2013 was $45 million.On January 1, 2010, Ameen Company purchased a building for $36 million. Ameen uses straight-line depreciation for financial statement reporting and MACRS for income tax reporting. At December 31, 2012, the carrying value of the
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Satisfactory Essays

    Tax Code 362 Case Study
    • 583 Words
    • 3 Pages

    Tax Code 362 Case Study

    When this section is applied, with respect to 351, the depreciated property transferred to Average Corporation has a basis equal to fair market value of the property on the transfer date. When Average sells the property soon after the transfer at fair market value no loss will be realized. Therefore, J’s plan will not succeed as there will be no capital loss available to carry over and offset the gain on the liquidation of Average Corporation’s appreciated assets, two years after the sale was…

    • 583 Words
    • 3 Pages
    Satisfactory Essays
    Read More
  • Satisfactory Essays

    Acc 291 Week 4 Wiley Plus Answers
    • 414 Words
    • 2 Pages

    Acc 291 Week 4 Wiley Plus Answers

    Journalize the above transactions. The company uses straight-line depreciation for buildings and equipment. The buildings are…

    • 414 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Satisfactory Essays

    Ac 556 Week 4 Assingment
    • 470 Words
    • 2 Pages

    Ac 556 Week 4 Assingment

    Salvage value | $8,000 | | | | | | | Before tax annual cash inflows | $28,500 | | | | | | | Tax rate | 35% | | | | | | | Discount rate | 14% | | | | | | | | | | | | | | | | 1. Annual accounting income | | | | | | | | | Annual cash inflows | $28,500 | | | | | | | | Depreciation expense | 12,000 | | | | | | | | | | | | | | | | | EBT | 16,500 | | | | | | | | Income tax | 5,775 | | | | | | | | | | | | | | | | | Accounting Income | $10,725 | | | | | | | | | | | | | | | | | | | | | | | | | 2. Annual after tax cash inflows | | | | | | | | | Accounting income | $10,725 | | | | | | | | Add back depr.…

    • 470 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Good Essays

    Generally Accepted Accounting Principles and Balance Sheet
    • 19531 Words
    • 63 Pages

    Generally Accepted Accounting Principles and Balance Sheet

    Carry Yoki’s Lounge consists of the following. Carry, the owner believed that people would come to hear a band play on Friday, Saturday, and Sunday evening. During the remainder of the week, she believed her customers would watch sporting events on several television sets located throughout the lounge. Carry employed two bartenders, three servers, two assistant servers, two cooks, one dishwasher and a clean-up person. She had a bar, 15 barstools, 4 tables, 40 chairs, 4 television sets, and one satellite dish. She had an oven, stove, grill, refrigerator, sinks, dishes, and glassware. Carry started this business with $50,000 of her own money, and she borrowed $150,000 from the bank. From this description, list each of the scarce resources that are used in Carry Yoki’s Lounge.…

    • 19531 Words
    • 63 Pages
    Good Essays
    Read More
  • Powerful Essays

    Assignment 2 – Acg11 Accounting for Business
    • 3150 Words
    • 13 Pages

    Assignment 2 – Acg11 Accounting for Business

    i) Why is depreciation expense recoded in the income statement for the building as Heath believes the building is worth more now than when he bought it five years ago?…

    • 3150 Words
    • 13 Pages
    Powerful Essays
    Read More
  • Good Essays

    Generally Accepted Accounting Principles and Net Income
    • 734 Words
    • 3 Pages

    Generally Accepted Accounting Principles and Net Income

    1. Arredondo, Inc. has current assets of $2,170, net fixed assets of $9300, current liabilities…

    • 734 Words
    • 3 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    Generally Accepted Accounting Principles
    • 2553 Words
    • 11 Pages

    Generally Accepted Accounting Principles

    1. Question : Student Answer: (TCO C) The cost of an intangible asset includes all of the following except purchase price. legal fees. other incidental expenses.…

    • 2553 Words
    • 11 Pages
    Satisfactory Essays
    Read More
  • Good Essays

    Ida Impairment
    • 969 Words
    • 4 Pages

    Ida Impairment

    Case 10-2 Ida’s Impairment Ida Inc. (Ida) is a manufacturing company with operations in the United States and Spain. As a U.S. subsidiary of a U.K. entity, Ida prepares its financial statements in accordance with (1) U.S. GAAP for reporting to its U.S.-based lender and (2) IFRSs in reporting to its parent. U.S. Operations In addition to other assets, Ida owns and operates a commercial building in the United States that is carried at its cost less any accumulated depreciation and any accumulated impairment losses. As of December 31, 2010, the building represents:  A cash-generating unit (CGU) under IFRSs.  A long-lived asset classified as held and used under U.S. GAAP. In December 2010, one of Ida’s competitors sold its commercial building for an amount significantly less than its asking price. The competitor’s building is located across the street from Ida’s building, has approximately the same square footage, and was built five years after Ida’s building was constructed. In preparing its 2010 financial statements, Ida’s management has provided the following information regarding the building as of December 31, 2010 (assume these values have been evaluated by Ida’s independent auditor and found to be reliable): 12/31/10 (in thousands) Carrying amount $4,500 Value in use $4,000 Fair market value less cost to sell $3,800 Fair market value $3,900 Undiscounted future cash flows $4,200 Spanish Operations In 2008, Ida acquired a smaller competing company located in Spain, and this acquisition resulted in goodwill being recorded. Assume that (1) the activities in Spain represent the lowest level at which internal management monitors goodwill and (2) the Spanish operations represent a CGU under IFRSs and a reporting unit under U.S. GAAP. At the end of 2008 and 2009:  Under IFRSs, the recoverable amount of the CGU, including goodwill, exceeded its carrying amount. Ida’s Building…

    • 969 Words
    • 4 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    Problem 10-9
    • 250 Words
    • 1 Page

    Problem 10-9

    ACCT305 P10-9 (1) Weighted-average accumlated expenditures by the end of 2009 are: January 3, 2009 $1,000,000 12/12 $1,000,000 March 1, 2009 $600,000 10/12 $500,000 June 30, 2009 $800,000 6/12 $400,000 October 1, 2009 $600,000 3/12 $150,000 Capitalized Int. Total Expenditures Average accumulated expenditures for 2009 $2,050,000 0.1 $205,000 $3,000,000 $3,205,000 Weighted-average accumlated expenditures by the end of 2010 are: January 1, 2010 $3,205,000 1 $3,205,000 January 31, 2010 $270,000 8/9 $240,000 $3,000,000 0.1 3/4 $225,000 April 30, 2010 $585,000 5/9 $325,000 $870,000 0.072 3/4 $46,980 August 31, 2010 $900,000 1/9 $100,000 Total to Capitalize in 2010 $271,980 Average accumulated expenditures for 2010 $3,870,000 Long Term Loans Weighted Average (2) Total Cost of building $4,000,000.00 0.06…

    • 250 Words
    • 1 Page
    Satisfactory Essays
    Read More
  • Good Essays

    Generally Accepted Accounting Principles and Company
    • 2790 Words
    • 12 Pages

    Generally Accepted Accounting Principles and Company

    If a company earns net income of $25 million in Year 8, has 10 million shares of stock, pays a dividend of $1.00 per share, and has annual interest costs of $10 million, then | |…

    • 2790 Words
    • 12 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    Generally Accepted Accounting Principles and Earnings Cash
    • 536 Words
    • 7 Pages

    Generally Accepted Accounting Principles and Earnings Cash

    1. DTE is wrong 2. Capex 3. Defrev 4. Contributed capital 5.…

    • 536 Words
    • 7 Pages
    Satisfactory Essays
    Read More
  • Satisfactory Essays

    Tax Accounting Research Paper
    • 806 Words
    • 4 Pages

    Tax Accounting Research Paper

    Facts: Murray Taxpayer was previously employed by a company who was illegally dumping chemicals into a river. Murray had knowledge concerning these illegal activities of his employer and made an ethical decision to report this to the Environmental Protection Agency. Upon inspection, the Environmental Protection Agency determined that Murrays employer was in fact illegally dumping and was appropriately fined for the charges. Murray’s employer reacted to his whistleblowing by firing him and making deliberate efforts to prevent Murray from gaining employment elsewhere. Murray then sued his former employer for damaging his reputation. Murray won the lawsuit and was awarded for “damages to his personal and professional reputation and for his mental suffering.” Murray claims that his award is excludable from income because it is for recovery of his human capital and therefore cannot be taxed. Murray would like to know if his award is taxable.…

    • 806 Words
    • 4 Pages
    Satisfactory Essays
    Read More
  • Good Essays

    Generally Accepted Accounting Principles and Substantive Tests
    • 1014 Words
    • 5 Pages

    Generally Accepted Accounting Principles and Substantive Tests

    Briefly describe your computation of planning materiality including the factors you considered in your estimate.…

    • 1014 Words
    • 5 Pages
    Good Essays
    Read More
  • Powerful Essays

    Corporate: Generally Accepted Accounting Principles and General Reserve
    • 1601 Words
    • 7 Pages

    Corporate: Generally Accepted Accounting Principles and General Reserve

    Under AASB127, the group is required to prepare the consolidation statement when parent entity acquires shares in the subsidiary. There are two parties who own shares in the subsidiary if it’s not a wholly-owned subsidiary consolidation. One is the parent entity while the other is non-controlling interest. Non-controlling interest (NCI) is defined as “the portion of the profit or loss and net assets of a subsidiary attributable to equity interest that are not owned, directly or indirectly through subsidiaries, by the parent” (Leo, et, al. 2009, p. 895).…

    • 1601 Words
    • 7 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    case two European hotel groups
    • 2256 Words
    • 10 Pages

    case two European hotel groups

    CASE: TWO EUROPEAN HOTEL GROUPS CONTENT 1 Financial statements ........................................................................................................................ 3 1.1 Impact of operating leases ............................................................................................ 3 1.2 Depreciation rates ......................................................................................................... 3 1.2.1 Accor ...................................................................................................................... 3 1.2.2 NH Hoteles............................................................................................................. 3 1.2.3 Conclusion ............................................................................................................. 4 1.3 Bad debt percentages .................................................................................................... 4 1.3.1 Accor ...................................................................................................................... 4 1.3.2 NH Hoteles............................................................................................................. 4 1.3.3 Conclusion ............................................................................................................. 4 1.4 Conclusion .................................................................................................................... 4 2 Credit rating .....................................................................................................................................…

    • 2256 Words
    • 10 Pages
    Powerful Essays
    Read More

Related Topics