Cpa 02148 pii may 93 43 page 25 in 19x2 portal corp

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Unformatted text preview: 5,000 $ 275,000 Choice "a" is incorrect. Cost of sales must be deducted. Choice "b" is incorrect. Cost of sales must be deducted and 100%, not 80%, of the dividends received are included in income before special deductions. Choice "d" is incorrect. The $25,000 dividend must be included in income before special deductions. CPA-02147 Type1 M/C A-D Corr Ans: D PM#71 R 3-01 53. CPA-02147 PII May 93 #42 Page 6 Ace Rentals Inc., an accrual-basis taxpayer, reported rent receivable of $35,000 and $25,000 in its 19X2 and 19X1 balance sheets, respectively. During 19X2, Ace received $50,000 in rent payments and $5,000 in nonrefundable rent deposits. In Ace's 19X2 corporate income tax return, what amount should Ace include as rent revenue? a. b. c. d. $50,000 $55,000 $60,000 $65,000 CPA-02147 Explanation Choice "d" is correct. Rent revenue under the accrual basis would include the cash received ($50,000) plus the increase in the rent receivable ($10,000 = $35,000 − 25,000), or $60,000. In addition, the $...
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This note was uploaded on 06/14/2013 for the course ACCOUNTING Regulation taught by Professor Becker during the Fall '10 term at Keller Graduate School of Management.

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