Question
In: Accounting
TPW, a calendar year taxpayer, sold land with a $535,000 tax basis for $750,000 in February....
TPW, a calendar year taxpayer, sold land with a $535,000 tax basis for $750,000 in February. The purchaser paid $75,000 cash at closing and gave TPW an interest-bearing note for the $675,000 remaining price. In August, TPW received a $55,950 payment from the purchaser consisting of a $33,750 principal payment and a $22,200 interest payment.
A.Compute gain realized on the sale. B.
B.Compute gain recognized in the year of sale if TPW elects not to use the installment sale method of accounting. Compute TPW’s tax basis in the note at the end of the year.
C.Compute gain recognized in the year of sale if TPW uses the installment sale method of accounting. Compute TPW’s tax basis in the note at the end of the year.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
TPW, a calendar year taxpayer, sold land with a $574,000 tax basis for $780,000 in February....
TPW, a calendar year taxpayer, sold land with a $574,000 tax
basis for $780,000 in February. The purchaser paid $78,000 cash at
closing and gave TPW an interest-bearing note for the $702,000
remaining price. In August, TPW received a $56,200 payment from the
purchaser consisting of a $35,100 principal payment and a $21,100
interest payment. In the first year after the year of sale, TPW
received payments totaling $107,400 from the purchaser. The total
consisted of $70,200 principal payments and...
TPW, a calendar year taxpayer, sold land with a $539,000 tax basis for $770,000 in February....
TPW, a calendar year taxpayer, sold land with a $539,000 tax
basis for $770,000 in February. The purchaser paid $79,000 cash at
closing and gave TPW an interest-bearing note for the $691,000
remaining price. In August, TPW received a $57,250 payment from the
purchaser consisting of a $34,550 principal payment and a $22,700
interest payment. Assume that TPW uses the installment sale method
of accounting.
a. Compute the difference between TPW’s book and tax income
resulting from the installment sale...
TPW, a calendar year taxpayer, sold land with a $542,000 tax basis for $785,000 in February....
TPW, a calendar year taxpayer, sold land with a $542,000 tax
basis for $785,000 in February. The purchaser paid $82,000 cash at
closing and gave TPW an interest-bearing note for the $703,000
remaining price. In August, TPW received a $58,250 payment from the
purchaser consisting of a $35,150 principal payment and a $23,100
interest payment. Assume that TPW uses the installment sale method
of accounting.
Compute the difference between TPW’s book and tax income
resulting from the installment sale method....
Marchal Inc., a calendar year, accrual basis taxpayer, made the following state income tax payments during...
Marchal Inc., a calendar year, accrual basis taxpayer, made the
following state income tax payments during 2019.
March 11 Balance due of 2018 tax $ 13,600
April 2 Estimated 2019 tax payment $ 15,250
June 2 Estimated 2019 tax payment $ 15,250
September 3 Estimated 2019 tax payment $ 15,250
December 2 Estimated 2019 tax payment $ 15,250
On December 28, Marchal's tax department calculated that the
corporation's actual 2019 state income tax liability was $67,140.
Consequently, Marchal accrued a...
Sunshine Company is a calendar year accrual-basis taxpayer and is in its first year of operations....
Sunshine Company is a calendar year accrual-basis taxpayer and
is in its first year of operations. Sunshine Company had the
following income, expense, and loss items for the current year:
Sales
$650,000
Corporate dividend (from 5% owned corporation)
60,000
Municipal bond interest
25,000
Long-term capital gain
0
Short-term capital loss
(8,000)
Cost of goods sold
320,000
Depreciation
65,000
Nondeductible fines
4,000
Advertising
7,000
Utilities
6,000
Rent
5,000
Furthermore, Sunshine’s liabilities (all recourse) increased
from $0 on 1/1 to $300,000 on...
Sunshine Company is a calendar year accrual-basis taxpayer and is in its first year of operations....
Sunshine Company is a calendar year accrual-basis taxpayer and
is in its first year of operations. Sunshine Company had the
following income, expense, and loss items for the current year:
Sales
$650,000
Corporate dividend (from 5% owned corporation)
60,000
Municipal bond interest
25,000
Long-term capital gain
0
Short-term capital loss
(8,000)
Cost of goods sold
320,000
Depreciation
65,000
Nondeductible fines
4,000
Advertising
7,000
Utilities
6,000
Rent
5,000
Furthermore, Sunshine’s liabilities (all recourse) increased
from $0 on 1/1 to $300,000 on...
Sunshine Company is a calendar year accrual-basis taxpayer and is in its first year of operations....
Sunshine Company is a calendar year accrual-basis taxpayer and
is in its first year of operations. Sunshine Company had the
following income, expense, and loss items for the current year:
Sales
$650,000
Corporate dividend (from 5% owned corporation)
60,000
Municipal bond interest
25,000
Long-term capital gain
0
Short-term capital loss
(8,000)
Cost of goods sold
320,000
Depreciation
65,000
Nondeductible fines
4,000
Advertising
7,000
Utilities
6,000
Rent
5,000
Furthermore, Sunshine’s liabilities (all recourse) increased
from $0 on 1/1 to $300,000 on...
Meganol Company is a calendar year accrual-basis taxpayer and is in its first year of operations....
Meganol Company is a calendar year accrual-basis taxpayer and is
in its first year of operations. Meganol Company had the following
income, expense, and loss items for the current year:
Sales
$650,000
Corporate dividend (from 5% owned corporation)
60,000
Municipal bond interest
25,000
Long-term capital gain
0
Short-term capital loss
(8,000)
Cost of goods sold
320,000
Depreciation
65,000
Nondeductible fines
4,000
Advertising
7,000
Utilities
6,000
Rent
5,000
Furthermore, Meganol's liabilities (all recourse) increased from
$0 on 1/1 to $300,000 on...
Sunshine Company is a calendar year accrual-basis taxpayer and is in its first year of operations....
Sunshine Company is a calendar year accrual-basis taxpayer and
is in its first year of operations. Sunshine Company had the
following income, expense, and loss items for the current year:
Sales
$650,000
Corporate dividend (from 5% owned corporation)
60,000
Municipal bond interest
25,000
Long-term capital gain
0
Short-term capital loss
(8,000)
Cost of goods sold
320,000
Depreciation
65,000
Nondeductible fines
4,000
Advertising
7,000
Utilities
6,000
Rent
5,000
Furthermore, Sunshine’s liabilities (all recourse) increased
from $0 on 1/1 to $300,000 on...
Sunshine Company is a calendar year accrual-basis taxpayer and is in its first year of operations....
Sunshine Company is a calendar year accrual-basis taxpayer and
is in its first year of operations. Sunshine Company had the
following income, expense, and loss items for the current year:
Sales
$650,000
Corporate dividend (from 5% owned corporation)
60,000
Municipal bond interest
25,000
Long-term capital gain
0
Short-term capital loss
(8,000)
Cost of goods sold
320,000
Depreciation
65,000
Nondeductible fines
4,000
Advertising
7,000
Utilities
6,000
Rent
5,000
Furthermore, Sunshine’s liabilities (all recourse) increased
from $0 on 1/1 to $300,000 on...
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