The tax rules for depreciation recapture are much more ________ than a simplified approach for disposal. A) basic B) complicated C) easy D) shortened ANSWER Answer: B
Date: September 19th, 2020
The current book value of an asset serves as the basis for determining the gain or loss at disposal. Indicate whether the statement is true or false. ANSWER Answer: TRUE
Date: September 19th, 2020
Which is NOT a step in the estimation of after-tax cash flow at disposal? A) If selling price is greater than book value: Selling Price – Tax on Gain. B) If selling price is less than book value: Selling Price + Tax Credit on Loss. C) If book value is less than selling price: Selling […]
Date: September 19th, 2020
If the selling price of an asset at disposal is greater than its book value, then the after-tax cash flow is the selling price minus the tax on the gain. Indicate whether the statement is true or false. ANSWER Answer: TRUE
Date: September 19th, 2020
A gain on disposal is recognized when the selling price of the asset is ________ the book value. A) greater than B) equal to C) less than D) greater than or equal to ANSWER Answer: A
Date: September 19th, 2020
Western Inc. purchases a machine for $15,000. This machine qualifies as a five-year recovery asset under MACRS with the fixed depreciation percentages as follows: year 1 = 20.00%; year 2 = 32.00%; year 3 = 19.20%; year 4 = 11.52%. Western has a tax rate of 33%. If the machine is sold at the end […]
Date: September 19th, 2020
As firms are unable to match cash inflows to outflows with certainty, most of them need current liabilities. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
A loss on disposal is recognized when the selling price of the asset is ________ the book value. A) greater than B) equal to C) less than D) less than or equal to ANSWER Answer: C
Date: September 19th, 2020
The accelerated write-off of capital costs in MACRS depreciation provides a taxable expense that reduces taxes at a faster rate than with straight-line depreciation. Therefore, according to ________ concepts, we can surmise that bigger tax cuts in the earlier years and lower tax cuts in the later years are better than a steady tax cut […]
Date: September 19th, 2020
MACRS allocates the same amount of cost each period as determined by the total initial cost divided by the number of years of useful life of the machines. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: STRAIGHT LINE DEPRECIATION allocates the same amount of cost each period as determined […]
Date: September 19th, 2020
