AC 507 Unit 4 Quiz (Kaplan University)
- The first and last years of MACRS depreciation deductions for a 5-year asset costing $10,000 using the half-year convention are:
- Conrad Corporation has a June 30 year end. What is the MACRS depreciation percentage deduction for the first year for a five-year asset acquired October 15 under the mid-quarter convention.
- Momee Corporation, a calendar-year corporation, bought only one asset in 2009, a crane it purchased for $700,000 on November 24. It disposed of the asset in April, 2014. What is its depreciation deduction for this asset in 2014 if cost recovery was determined using only regular MACRS?
- Gregory Corporation, a calendar-year corporation, purchased an office building in March of year 1. In September of year 17, it sold the building. What fraction must be applied to the MACRS percentage to determine the year 17 depreciation?
- Bangor Company incurred $70,000 of research costs in year 1. In May of year 2, it began to sell the products developed through this research. Which of the following is correct regarding these expenditures?
- Research and experimentation expenditures can be:
- The following properties have been owned by a business for more than one year. Which of them would not qualify for Section 1231 treatment on its disposal?
- A business sells a machine used in its business for $18,000. It had purchased the machine 10 months earlier for $26,000. What is the amount and type of the $8,000 loss on the sale of the asset?
- Wesley sold a piece of property for $30,000 cash paying a $3,000 sales commission. The buyer assumed Wesley’s $13,000 mortgage on the property. Wesley had purchased the property for $15,000 and had invested an additional $6,000 in it. What is Wesley’s realized gain on the sale?
- Caldwell Corporation sold a factory building for $300,000. The building originally cost $600,000 and had an adjusted basis of $200,000 due to the $400,000 depreciation taken when it was sold. What is Caldwell’s Section 1231 gain on the sale of the property?
- Sheldon had salary income of $40,000. In addition, he had the following gains and losses on his property transactions: Long-term capital gain = $14,000; long-term capital loss = $6,000; short-term capital gain = $4,000; short-term capital loss = $8,000. If Sheldon has no other income items, what is his total income before any deductions for the year?
- Grill Corporation sold all of its business assets when it went out of business. Which of the following is a capital asset?