Deductible amount
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Q: 3
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- John’s uncle donated a truck to his company, John’s Corporation. The truck had an original cost of $95,000, a book value of $40,000, and a fair value of $55,000. The journal entry by John’s Corporation to record this donated asset will include a a. debit Truck for $60,000 and credit Gain for $20,000. b. debit Truck for $55,000 and credit Gain for $55,000. c. debit Truck for $95,000 and credit Gain for $95,000. d. debit Truck for $60,000 and credit Gain for $60,000.2) Tania purchased a land ($750,000) and a little old home ($150, 000) located on the land for $900,000. She will depreciate the amount of A. $900,000 over the useful life of the Land B. $150,000 over the useful life of the Home C. $750,000 over the useful life of the Land D. $900,000 over the useful life of the HomeThe company has recieved a donation of land from a rich local philanhropist. the land originally cost the philanhropist $48,000. on the date of the donation, it had a market value of $111,000. Make the journal entry necessary on the book of the company to record the receipt of the land
- T purchased a 600 acre farm for $60,000. T sells to a power company an easement for 20 acres along the southern boundary of the property for a line of power poles. T received $5,000 for the easement. What is Ts gain?Bob the Builder purchased a land and building in Year 6 for $4,000,000. $1.6 million of the purchase price was allocated to the land, and the balance to the building. At the time of the purchase it was estimated that the building would have a useful life of 40 years but no residual value. In Year 17, Bob exchanged the land and building for a piece of undeveloped land. Bob also received $100,000 cash to make up the difference in the fair values of the assets exchanged. The fair market value of the assets given up was estimated to be $6.2 million; the fair value of the land to be received was $6.1 million. Bob depreciates his buildings using the straight-line method. Bob records a full year of depreciation expense in the year of acquisition and no depreciation expense in the year of disposal. (1) Prepare the journal entry to record the exchange of the asset in Year 17 for Bob the Builder, assuming that the transaction has commercial substance (general case). (2) Prepare the journal entry…Nicky receives a car from Sam as a gift. Sam paid 48,000 for the car. He had used it for business purposes and had deducted 10,000 for depreciation up to the time he gave the car to Nicky. The fair market value of the car is 33,000. a. Assuming that Nicky uses the car for business purposes, what is her basis for depreciation? b. Assume that Nicky deducts depreciation of 6,500 and then sells the car for 32,500. What is her recognized gain or loss? c. Assume that Nicky deducts depreciation of 6,500 and then sells the car for 20,000. What is her recognized gain or loss?