Hannibal owns a farm. He purchases a tractor in 2007 at a cost of $25,000. Because 2007
Question:
Because 2007 is a bad year, he does not deduct any depreciation on the tractor in 2007. He sells the tractor in 2011 for $16,000. He takes straight-line depreciation on the tractor of $12,500 for the years 2008 to 2011. The total allowable straight-line depreciation for the tractor for 2007 to 2011 is $15,000. What is Hannibal's gain or loss on the sale of the tractor? Explain.
Step by Step Answer:
The basis of depreciable property must be reduced by the greater of the ...View the full answer
Concepts In Federal Taxation
ISBN: 9780324379556
19th Edition
Authors: Kevin E. Murphy, Mark Higgins, Tonya K. Flesher
Related Video
In accounting terms, depreciation is defined as the reduction of the recorded cost of a fixed asset in a systematic manner until the value of the asset becomes zero or negligible. An example of fixed assets are buildings, furniture, office equipment, machinery, etc. The land is the only exception that cannot be depreciated as the value of land appreciates with time. Depreciation allows a portion of the cost of a fixed asset to be the revenue generated by the fixed asset. This is mandatory under the matching principle as revenues are recorded with their associated expenses in the accounting period when the asset is in use. This helps in getting a complete picture of the revenue
Students also viewed these Intellectual Property questions
-
Hannibal owns a farm. He purchases a tractor in 2012 at a cost of $25,000. Because 2012 is a bad year, he does not deduct any depreciation on the tractor in 2012. He sells the tractor in 2016 for...
-
Hannibal owns a farm. He purchases a tractor in 2016 at a cost of $25,000. Because 2016 is a bad year, he does not deduct any depreciation on the tractor in 2016. He sells the tractor in 2020 for...
-
Daryl purchases land in 2007 at a cost of $65,000. In 2011, he sells the land for $100,000. a. How much gain or loss does Daryl realize on the sale of the land? b. Assume that the sales contract on...
-
Use a histogram to graph the cumulative frequencies. Use the following information to answer question. Suppose a class of high school seniors had the following distribution of SAT scores in English....
-
Inactivation of the eukaryotic proto-oncogene c-myc involves premature termination of its RNA transcripts near the promoter. What feature of this phenomenon is likely to be similar to attenuation in...
-
Selected accounts from the chart of accounts of Linvik NV are shown below. 101 Cash 112 Accounts Receivable 120 Inventory 126 Supplies 140 Land 145 Buildings 201 Accounts Payable 401 Sales Revenue...
-
Examine the industry average ratios given in Problems 17.4 and 17.5 above. Explain why the ratios are different between the managed care and nursing home industries?
-
In 2009, Xio and Xandra each invest $300,000 to create Xava Corporation. Xava develops and manufactures rock climbing and bungee jumping equipment. The business has become very profitable (it now is...
-
Entered Answer Preview Result | (4.5 0) l (L9 0) l correct -(infinity,-4.) 5) (0 (infinity) ('_OO 4 5) U ('0 00) - I .45 0 | 4 5 O | correct At least one of the answers above is NOT correct. (1...
-
1. What is the cost of debt for Sunrise Bakery? 2. What is their cost of equity? 3. What is the WACC? 4. Which cost of capital should be used to evaluate the feasibility of the oven purchase? 5....
-
Carl Corporation acquires a business use warehouse for $200,000 on January 2, 2004. From 2004 through 2009, Carl Corporation properly deducts a total of $30,000 in depreciation. Carl incurs a net...
-
Determine whether each of the following transactions would result in an increase in basis, a decrease in basis, or no effect on basis: a. Dolly pays $3,000 for a survey to disprove her neighbor's...
-
What are the four stages of the marketing life cycle?
-
What is Dinesh D'Souza's position on the impact of colonialization in Third World countries? What is Grameen Bank? According to Aneel Karnani, why are the benefits from Grameen Bank limited for LDCs...
-
5. Define the sequence of functions (f(x)) on R by f(x) = if x = 1, 1 1 23 10 otherwise and let f(x) be the pointwise limit of this sequence. (a) Is cach fn(x) continuous at 0? Justify your answer....
-
Assess each of the ten scenarios described below and explain whether each information disclosure may be made by the covered entity under 45 C.F.R. 164.510. Be sure to explain why or why not and to...
-
7. (1 point) Express the function y = x+6 as a composition y = f(g(x)) of two simpler functions y = f(u) and u = g(x). Generated by WeBWorK, http://webwork.maa.org, Mathematical Association of...
-
Check my work Robinson Products Company has two service departments (S1 and S2) and two production departments (P1 and P2). The distribution of each service department's efforts (in percentages) to...
-
_____________ refers to the avoidance of checking email, sending text messages, watching television, or answering the phone.
-
Show that, given a maximum flow in a network with m edges, a minimum cut of N can be computed in O(m) time.
-
A proponent of the classical view of corporate social responsibility would most likely agree with which of these statements? (a) Social responsibility improves the public image of business. (b) The...
-
Determine the maximum deduction from AGI in 2021 for each of the following taxpayers: a. Selen is single and has itemized deductions for the year of $12,900. In addition, Selen's mother lives with...
-
Determine the maximum deduction from AGI in 2021 for each of the following taxpayers: a. Pedro is single and maintains a household for his father. His father is not a dependent of Pedros. Pedros...
-
Determine the 2021 filing status in each of the following situations a. Michaela and Harrison decide to separate on October 12, 2021. Before filing their 2021 tax return on February 18, 2022,...
-
Determine the sales mix and contribution margin ratio for each division. \ table [ [ , Computers,,VG Systems ] , [ Sales mix,, % , s ] , [ Contribution margin ratio,, % , 9 ] ]
-
EB 9 . LO 8 . 3 Eagle Inc. uses a standard cost system. During the most recent period, the company manufactured 1 1 5 , 0 0 0 units. The standard cost sheet indicates that the standard direct labor...
-
Present Value of Bonds Payable; Premium Moss Co . issued $ 1 0 1 , 0 0 0 of five - year, 1 2 % bonds with interest payable semiannually, at a market ( effective ) interest rate of 9 % . Determine the...
Study smarter with the SolutionInn App