20111019 Chat Wed Cpt 13

20111019 Chat Wed Cpt 13 - Chat problems Chapter 13...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Chat problems Chapter 13 Wednesday the 19th of October, 2011 Multiple Choice—Accounting Methods: Changes 57. c. Depending on the amount of adjustment, the taxpayer may elect to take the adjustment in the year of change (if less than $25,000) or use the four-year adjustment period beginning with the year of change. This rule applies to positive and negative adjustments. Multiple Choice—Installment Sales: Computation of Gain 58. c. Where sales are made on an established market and cash settlement of transactions customarily occurs several business days after the date on which a trade is made, gain or loss is recognized on the day that the trade is executed by both cash- and accrual-method taxpayers. The option previously available to year-end stock sales, which allowed the taxpayer to report the proceeds in the following year unless the taxpayer elected out of the installment method, has been eliminated. Multiple Choice—Installment Sales: Computation of Gain 59. c. Mabel’s share of the mortgage must have been $45,000 ($110,000 − $15,000 − $50,000). The contract price is: Down payment $15,000 15000 Installment obligation 50,000 50000 Excess of mortgage assumed over basis 5,000 5000 Contract price $70,000 70000 Gross profi t percentage ($70,000 ÷ $70,000) = 100 % 100% Payments in year of sale: Down payment $15,000 15000 Mortgage assumed in excess of basis 5,000 5000 Installment payment made 5,000 5000 Payments in year of sale $25,000 25000 Multiple Choice—Accounting Periods 60. b. A year ending September 15 would not be an acceptable year. In general, a tax year must end on the last
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 2

20111019 Chat Wed Cpt 13 - Chat problems Chapter 13...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online