Chapter_16

Chapter_16 - CHAPTER 16 ACCOUNTING PERIODS AND METHODS...

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CHAPTER 16 ACCOUNTING PERIODS AND METHODS SOLUTIONS TO PROBLEM MATERIALS Status: Q/P Question/ Present in Prior Problem Topic Edition Edition 1 Tax year: natural business year Modified 1 2 Tax year: S corporation Unchanged 2 3 Tax year: personal service corporation Unchanged 3 4 Restoration under claim of right doctrine and Unchanged 4 tax benefit rule 5 Farming: income fluctuation Unchanged 5 6 Accrual basis: who must use Unchanged 6 7 Change in accounting method: § 481 adjustment New 8 Cash versus accrual method Unchanged 8 9 Cash versus accrual method Unchanged 9 10 Accounting method: timing of deduction New 11 Use of reserves Unchanged 11 12 Installment method: benefits Unchanged 12 13 Recognized gain: effects of mortgage New assumed 14 Installment method: related parties Unchanged 14 15 Installment method: electing out Unchanged 15 16 Long-term contracts; crop method Unchanged 16 17 Long-term contracts: length Unchanged 17 *18 Partnership tax year Unchanged 18 19 Fiscal year: personal service corporation Unchanged 19 *20 Change in tax year: short-period tax Unchanged 20 21 Cash versus accrual method: tort and breach Unchanged 21 of contract 22 Cash and accrual basis expenses and income Modified 22 23 Accounting method: required versus optional use New 24 Accrual basis: all-events test and economic Unchanged 24 performance test 16-1
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16-2 2009 Comprehensive Volume/Solutions Manual Status: Q/P Question/ Present in Prior Problem Topic Edition Edition 25 Change in accounting method: § 481 adjustment Modified 25 *26 Installment method: benefits Unchanged 26 *27 Installment method: calculations Unchanged 27 *28 Installment sales: election to forgo New *29 Installment sales between related parties New *30 Disposition of installment obligations Unchanged 30 31 Long-term contracts: completed contract method Unchanged 31 32 Long-term contracts: capitalization versus Unchanged 32 expense and percentage of completion method 33 Long-term contract methods Unchanged 33 34 Long-term contract methods Unchanged 34 *35 Percentage of completion method: lookback Unchanged 35 Research Problem 1 Recurring item exception New 2 Uniform capitalization Unchanged 2 3 Internet activity New *The solution to this problem is available on a transparency master.
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Accounting Periods and Methods 16-3 CHECK FIGURES 18.a. FYE March 31. 18.b. FYE June 30. 19.a. $45,000. 19.b. Deduction limit $120,000. 20. $4,583. 22.a. Deduction $50,000 under both methods. 22.b. Accrual income $12,000; cash basis income $10,000. 22.c. Accrual deduction $0 for 2008; cash basis deduction $30,000 for 2008. 22.d. Accrual and cash basis deduction $138,289. 23.a. Accrual method. 23.b. Cash method. 23.c. Completed contract method or cash method. 23.d.
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This note was uploaded on 04/21/2009 for the course ACCT 3231-02 taught by Professor Brilliant during the Spring '09 term at Kean.

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Chapter_16 - CHAPTER 16 ACCOUNTING PERIODS AND METHODS...

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