Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

BM Corporation sold some inventory on may 1, 2023 with a value of $350,000 and a cost of $87,500. A cash down payment of $50,000

BM Corporation sold some inventory on may 1, 2023 with a value of $350,000 and a cost of $87,500. A cash down payment of $50,000 was made and the rest of the balance was payable in 4 instalments of $75,000 each year on May 1st start 2024. The purchase was arm's length. What would be the Net reported income for 2023 and 2024 assuming the company has a December 31st year end?

 a) Net reported income for 2023 and 2024 is $56,250 for both years 

B) Net reported income for 2023 is $37,500 and for 2024 is $56,250 

C) Net reported income for 2023 is $262,500 and for 2024 is zero 

D) Net reported income for 2023 is $70,313 and for 2024 is $79,687

Step by Step Solution

3.43 Rating (150 Votes )

There are 3 Steps involved in it

Step: 1

The detailed answer for the above question is provided below To ca... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Federal Taxation 2021 Corporations, Partnerships, Estates & Trusts

Authors: Timothy J. Rupert, Kenneth E. Anderson, David S. Hulse

34th Edition

0135919460, 978-0135919460

More Books

Students also viewed these Accounting questions

Question

Describe the quality ethics connection.

Answered: 1 week ago