Question
22. Mark the correct answer. In calculating depreciation: A. Straight-line depreciation is higher than double declining balance depreciation in the early years B. Straight-line depreciation
22. Mark the correct answer. In calculating depreciation:
A. Straight-line depreciation is higher than double declining balance depreciation in the early years
B. Straight-line depreciation is higher than double declining balance depreciation in the later years
C. Double declining balance is a method of straight line depreciation
D. MACRS depreciation requires that salvage value be taken into account
23. In January 2011, Keystone Trucking company exchanged an old truck, which cost $74,000 and had accumulated depreciation of $38,000, for a new truck having a fair market value of $82,000. In connection with the exchange, Keystone paid $40,000 in cash. What is the basis of the new truck?
24. Grevilla Inc. is an S corporation that has chosen a fiscal year ending November 30. For the fiscal year ended November 30, 2011, Grevilla Inc. had taxable income of $180,000 and the prior year made a required payment of $1,000. What is the amount of the required payment which should be made in 2012?
25. Which of the following is true about capital gains? |
A. Short-term capital gains are not netted with other capital gains and losses
B. For 2011, long-term capital gains are subject to special tax treatment
C. Long-term capital gains are never taxed
D. Net short-term capital gains are not netted with net long-term capital losses
26. Kate is an accrual basis, calendar-year taxpayer. On November 1, 2011, Kate leased out a building for $4,000 a month. On that day Kate received 6 months rental income on the building, a total of $24,000. How much income must Kate include on her 2011 tax return as a result of this transaction?
27. Walnut Interests is a partnership owned equally by Bob, Jon and Gary. Bob and Jon each have a November 30 tax year-end, while Gary has a January 31 tax year-end. Under the general rule, what tax year end should the partnership adopt? |
A. December 31
B. January 31
C. November 30
D. November 30 0r January 31
28. Which of the following is not an acceptable method of accounting under the tax law? |
A. The accrual method
B. The cash method
C. The hybrid method
D. All of the above are acceptable
29. Simon sold investment property 2 years ago for $750. Simon's basis in the property was $200. Simon is receiving $150 per year from the buyer. Simon reports this income on the installment method. If Simon collects $150 in principal during the current year, how much gain should he report from the sale for the year?
A. $90
B. $0
C. $75
D. $110
E. None of these choices are correct.
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