In year 0, Longworth Partnership purchased a machine for $58,500 to use in its business. In...

In year 0, Longworth Partnership purchased a machine for $58,500 to use in its business. In year 3, Longworth sold the machine for $36,600. Between the date of the purchase and the date of the sale, Longworth depreciated the machine by $26,000. a.What is the amount and character of the gain Longworth will recognize on the sale? b.What is the amount and character of the gain Longworth will recognize on the sale if the sale proceeds were increased to $59,750? c. What is the amount and character of the gain Longworth will recognize on the sale if the sale proceeds were decreased to $19,200 (before the §1231 netting process, if applicable)?

Expert Solution

If you have any queries please ask me in the comment i am here for help you. Please do not direct thumbs down just ask if you have any query. And if you like my work then please appreciates with up vote. Thank You.

ekkarill92 answered 8 months ago

In year 0, Longworth Partnership purchased a machine for $57,250 to use in its business. In...

In year 0, Longworth Partnership purchased a machine for $57,250 to use in its business. In year 3, Longworth sold the machine for $44,300. Between the date of the purchase and the date of the sale, Longworth depreciated the machine by $24,900. (Loss amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.) a. What is the amount and character of the gain (loss) Longworth will recognize on the sale? Description Amount Total Gain/(Loss)...

On August 1 of year 0, Dirksen purchased a machine for $29,000 to use in its...

On August 1 of year 0, Dirksen purchased a machine for $29,000 to use in its business. On December 4 of year 0, Dirksen sold the machine for $27,750. (Use MACRS Table.) (Loss amounts should be indicated by a minus sign. Do not round percentages used for calculations. Leave no answer blank. Enter zero if applicable.) a. What is the amount and character of the gain or loss Dirksen will recognize on the sale? Description Amount Total Gain/Loss Recognized Character...

On August 1 of year 0, Dirksen purchased a machine for $28,500 to use in its...

On August 1 of year 0, Dirksen purchased a machine for $28,500 to use in its business. On December 4 of year 0, Dirksen sold the machine for $24,250. Use MACRS Table. (Loss amounts should be indicated by a minus sign. Do not round percentages used for calculations. Round other intermediate computations to the nearest whole dollar amount. Leave no answer blank. Enter zero if applicable.) a. What is the amount and character of the gain or loss Dirksen will...

This year Amy purchased $2,650 of equipment for use in her business. However, the machine was...

This year Amy purchased $2,650 of equipment for use in her business. However, the machine was damaged in a traffic accident while Amy was transporting the equipment to her business. Note that because Amy did not place the equipment into service during the year, she does not claim any depreciation expense for the equipment. a. After the accident, Amy had the choice of repairing the equipment for $1,960 or selling the equipment to a junk shop for $330. Amy sold...

ACY Limited (“ACY”) purchased a specialized machine for its business use for a total price of...

ACY Limited (“ACY”) purchased a specialized machine for its business use for a total price of $3,000,000, paid in cash, on 1 January 2018. The total price included installation fee of $50,000, which enabled the machine to be immediately available for ACY’s use on 1 January 2018. This is estimated that the machine has a useful life of 10 years with a residual value up to $200,000. Double-declining-balance depreciation method is adopted. On 1 January 2018, to help finance the...

1- ack purchased a printing machine for $100,000 for use in business. As to the machine...

1- ack purchased a printing machine for $100,000 for use in business. As to the machine he deducted MACRS cost recovery of $30,000, repair costs of $3,000 and maintenance costs of $4,225. Calculate Jack's adjusted basis for the machine? 2- Jack invests $15,000 cash in a leasing activity for a 15% ownership share in the business. The remaining 85% owner is Jill. Jill contributed $10,000 and borrows $75,000 that she invests in the business. What is the at-risk amounts for...

5. Stegman Company purchased a machine on January 2 for its business for $243,000. The machine...

5. Stegman Company purchased a machine on January 2 for its business for $243,000. The machine has an expected useful life of 5 years and an expected salvage value of $9,000. The company expects to use the machine for 1,400 hours in the first year, 2,000 hours in the second year, 1,600 hours in the third year, 1,450 hours in the fourth year, and 1,200 hours in the final year. Calculate the annual depreciation expense for each of the five...

Koza Automotive purchased a CNC machine for $20,000 in year 0. The useful life of the...

Koza Automotive purchased a CNC machine for $20,000 in year 0. The useful life of the machine is 10 years, at the end of which the machine is estimated to have a salvage value of zero. The machine generates net annual revenues of $6,000. The annual operating and maintenance expenses are estimated to be $1,000. If their MARR is 15%, how many years will it take before this machine becomes profitable?

Salam Corporation purchased a vibratory finishing machine for $25,000 in year 0. The useful life of...

Salam Corporation purchased a vibratory finishing machine for $25,000 in year 0. The useful life of the machine is 10 years, at the end of which the machine is estimated to have a salvage value of 5,000 after 10 years. The machine generates net annual benefits of $5,000.The Conventional and Discounted Payback Period If SALAM’s MARR (rate of return) is 12%, will be following? Conventional Pay Back of 6 years & Discounted Pay Back of 9 years Conventional Pay Back...

Watts and Lyon are forming a partnership. Watts invests $31,500 and Lyon invests $58,500. The partners...

Watts and Lyon are forming a partnership. Watts invests $31,500 and Lyon invests $58,500. The partners agree that Watts will work one-fourth of the total time devoted to the partnership and Lyon will work three-fourths. They have discussed the following alternative plans for sharing income and loss: (a) in the ratio of their initial capital investments; (b) in proportion to the time devoted to the business; (c) a salary allowance of $21,000 per year to Lyon and the remaining balance...

Question