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- Which of the following is not true in determining the holding period of capital assets acquired during the current year? Group of answer choices 1.The holding period for property acquired from a decedent is short term if the property is sold less than one year after it was acquired by the decent. 2.Trade dates, rather than settlement dates, are used to determine the date of acquisition and sale. 3.The holding period is short-term for stock you purchase on March 15 and sell on March 1 of the following year. 4.The holding period of the donor of a gift is usually included in the holding period of the donee.An entity operates a chain of hotels and is proposing to stop depreciating the hotel equipment and expense the cost of replacement each year. The entity should ________. Select one: a. not capitalise groups of assets and expense the replacement cost b. capitalise all assets with a useful life of more than one year and depreciate them c. capitalise groups of assets but not depreciate them d. not capitalise groups of assets and expense themThis year, Sigma, Incorporated generated $637,500 income from its routine business operations. In addition, the corporation sold the following assets, all of which were held for more than 12 months: Initial Basis $ 165,200 110,800 Accumulated Depreciation $0 88,640 223,500 206,000 Marketable securities Production equipment Business realty: Land Building. "Through date of sale. Required: a. Compute Sigma's taxable income assuming that it used the straight-line method to calculate depreciation on the building and has no nonrecaptured Section 1231 losses. b. Recompute taxable income assuming that Sigma sold the securities for $169,400 rather than $73,750. Complete this question by entering your answers in the tabs below. Sale Price $ 73,750 38,000 0 61,800 236,750 231,000 Required A Required B Compute Sigma's taxable income assuming that it used the straight-line method to calculate depreciation on the building and has no nonrecaptured Section 1231 losses. Taxable income
- Classification 1. An entity invests in a pool of assets that is managed by an investment house. In accordance with the entity's business model, the investment will be held until it matures in 10 years' time, at which date the entity will collect the principal amount in the investment together with the interest earned. In accordance with the principles of PFRS 9, the entity will most likely measure the investment at c. FVOCI (Mandatory). d. FVOCI (Election). a. Amortized cost. b. FVPL. 2. An entity plans to purchase a new machine in a few years' time. The cost of the new machine is significant. To address this, the entity invests in debt securities. The entity's investment management strategy is to hold the investment and collect the investment income in the form of interest. However, when opportunity arises, the entity sells the investment in order to realize fair value gain. The entity reinvests any proceeds from sales until the date of purchase of the new machine. In accordance with…1. E. Adentwi Enterprises Ltd bought a machine for GH₵ 150,000 on 1st January 2019. It depreciates the machine on cost over four years assuming a nil residual value.The company received a grant of GH₵30,000 from the municipal assembly to support the acquisition of the machines. required :Account for this grant under the netting off method. 2. Polycarp Ltd adopts revaluation model for subsequent measurement of its intangible assets in accordance with IAS 38: Intangible assets. The policy of Polycarp is to revalue its intangible asset at the end of each year. An intangible asset with an estimated useful life of 9 years was acquired on 1 January 2018 for GH¢45,000. It was revalued to GH¢54,400 on 31 December 2018 and the revaluation surplus was correctly recognized on that date. As at 31 December 2019, the asset was revalued at GH¢32,000.Required:Discuss the accounting treatment required in 2018 and 2019 financial statements.In its first year, Firm KZ recognized $427,300 ordinary business income and a $13,590 loss on the sale of an investment asset. In its second year, Firm KZ recognized $500,800 ordinary business income, a $19,300 Section 1231 gain, and a $7,400 Section 1231 loss on two sales of operating assets. * I only need Requirement D to be solved. Required: d. Compute KZ's deferred tax asset or liability (identify which) on its balance sheet on the last day of the second year.
- A company bought a building with the intention of selling it in two years ' time and not to use it for their own operations . The building will be reported in the classified Statement of Financial Position as: A) a an intangible asset b) property , plant and equipment с) a long -term investment d) a land expenseWhat accounting assumption, principle, or constraint would Target Corporation use in each of the situations below? a. Target was involved in litigation over the last year. This litigation is disclosed in the financial statements. b. Target allocates the cost of its depreciable assets over the life it expects to receive revenue from these assets. c. Target records the purchase of a new Dell PC at its cash equivalent price.Stag, a public limited company, is preparing its financial statements for the year ending 31 December 2021. The exhibits contain information relevant to the question. Exhibit 1– Accounting for ImpairmentStag plc, which has a 31 December year end, acquired an item of property, plant, and equipment (PPE) on 1 January 2019 for £50,000 for which it applies the revaluation model. The asset is depreciated on a straight-line basis over its useful economic life of ten years (the assumed residual value is nil). On 1 January 2020, it was established that the gross replacement cost of the asset (i.e. the gross revalued amount of the asset before any depreciation is deducted) was £60,000. On 31 December 2021, there are indications that the asset is impaired, an impairment test is carried out, and the recoverable amount at that date is estimated as £30,000. Requirement:Using Exhibit 1, explain the impact of the transactions on the financial statements 2020 and 2021. (Hint: you can show the double…
- Stag, a public limited company, is preparing its financial statements for the year ending 31 December 2021. The exhibits contain information relevant to the question. Exhibit 1– Accounting for ImpairmentStag plc, which has a 31 December year end, acquired an item of property, plant, and equipment (PPE) on 1 January 2019 for £50,000 for which it applies the revaluation model. The asset is depreciated on a straight-line basis over its useful economic life of ten years (the assumed residual value is nil). On 1 January 2020, it was established that the gross replacement cost of the asset (i.e. the gross revalued amount of the asset before any depreciation is deducted) was £60,000. On 31 December 2021, there are indications that the asset is impaired, an impairment test is carried out, and the recoverable amount at that date is estimated as £30,000. Requirement:Using Exhibit 1, explain the impact of the transactions on the financial statements 2020 and 2021. (Hint: you can show the double…Which of the following companies has a disclosure for which FASB ASC 450 applies, but FASB ASC 275 does not? O Comfort House has a loss contingency at the financial statement date, and it is remotely A. possible that the estimate for this contingency will change by a material amount within the next year. B. The Garden Foundation has an asset on which the depreciation will be recalculated due to the life of the assets being extended. C. The Summer Group has equipment that will be written down. D. The Winter Group has an intangible asset that needs to be written down.Identy the type(s) of gain or loss that would be recognized on the following asset sales as capital, Section 1231, Ordinary, Section 1245 recapture, Section 291 recapture, or Section 125 unrecaptred gain. a. gain on the sale of stock by an individual ________________ b. gain on the sale of a building used for 15 years by a corporation_____________ c. gain on the sale of a machine used by a business for four years sold at a price less that its original cost____________________ d. gain on the sales of inventory______________________ e. loss on the sale of equipmment used in a business for three years_________ f. gain on the sale of a machine used by a business for 11 months__________ g. Loss on th factoring of receivables______________ h. gain on sales of a building used by a sole proprietorship for eight years in excess of its original cost._______________________