Cpa 05271 type1 mc a d corr ans c pm104 r 3 01 71

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Unformatted text preview: real estate taxes of $5,000 in the current year. What is the total depreciable basis of Dove's business property? a. b. c. d. $100,000 $150,000 $155,000 $160,000 CPA-04762 Explanation Choice "a" is correct. The only amount that may be depreciated is the $100,000 that Dove spent to construct the building. The $50,000 cost of the land is not depreciable as land is not a depreciable asset. The fair market value of the land ($60,000) is irrelevant for depreciation purposes. The real estate taxes ($5,000) are a deductible expense to the business that would not be capitalized. Choice "b" is incorrect. The cost of the land is not a depreciable expense. 31 © 2009 DeVry/Becker Educational Development Corp. All rights reserved. Maxixishere Pdf Collection Becker CPA Review, PassMaster Questions Lecture: Regulation 3 Choice "c" is incorrect. The cost of the land is not a depreciable expense. The real estate taxes ($5,000) are a deductible expense to the business that would not be capitalized. Choice "d" is incorrect. The fair market value of the la...
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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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