On July 1, 2017, Carla Vista Company received $990,000 cash as compensation for the forced sale (condemnation) of the company's land and building. The state planned to use the property to build a new on-ramp for a nearby highway. The land and building cost $450,000 and $765,000, respectively, when they were acquired. At July 1, 2017, the accumulated depreciation relating to the building amounted to $337,500. On December 1, 2017, Carla Vista purchased a piece of replacement property for cash. The new land cost $324,000, and the new building cost $963,000. Prepare the journal entries to record the transactions on July 1 and December 1, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit July 1 December 1

On July 1, 2017, Carla Vista Company received $990,000 cash as compensation for the forced sale (condemnation) of the company's land and building. The state planned to use the property to build a new on-ramp for a nearby highway. The land and building cost $450,000 and $765,000, respectively, when they were acquired. At July 1, 2017, the accumulated depreciation relating to the building amounted to $337,500. On December 1, 2017, Carla Vista purchased a piece of replacement property for cash. The new land cost $324,000, and the new building cost $963,000. Prepare the journal entries to record the transactions on July 1 and December 1, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit July 1 December 1

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter18: Accounting Periods And Methods

Section: Chapter Questions

Problem 66P: At the end of 2020, Magenta Manufacturing Company discovered that construction cost had been...

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At the end of 2020, Magenta Manufacturing Company discovered that construction cost had been capitalized as a cost of the factory building in 2015 when it should have been treated as a cost of production equipment installation costs. As a result of the misclassification, the depreciation through 2018 was understated by 110,000, and depreciation for 2019 was understated by 90,000. What would be the consequences of correcting for the misclassification of the property cost? a. The taxpayer uses the FIFO inventory method, and 25% of goods produced during the period were included in the ending inventory. b. The taxpayer uses the LIFO inventory method, and no new LIFO layer was added during 2019.
On July 1, 2017, Sandhill Company received $1,012,000 cash as compensation for the forced sale (condemnation) of the company’s land and building. The state planned to use the property to build a new on-ramp for a nearby highway. The land and building cost $460,000 and $782,000, respectively, when they were acquired. At July 1, 2017, the accumulated depreciation relating to the building amounted to $345,000. On December 1, 2017, Sandhill purchased a piece of replacement property for cash. The new land cost $331,200, and the new building cost $984,400.Prepare the journal entries to record the transactions on July 1 and December 1, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
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