Note the distinction of whether the shareholders were

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Unformatted text preview: s in connection with the rental income. What amount of gross income should Pierce report on its 1997 tax return? a. b. c. d. $350,000 $250,000 $100,000 $0 CPA-02252 Explanation Choice "a" is correct. Pierce should report $350,000 in gross income for 1997. Rule: In general, the rules for corporate tax accounting and GAAP accounting are the same. However, rental income received in advance, nonrefundable rent deposits, and lease cancellation payments are rental income when received (because the government wants to collect the taxes while the taxpayer still has the cash to pay them). 1997 gross income: Advance rental payments received in 1997 $250,000 Lease cancellation payments received 100,000 1997 gross income $350,000 Choices "b", "c", and "d" are incorrect, per above rule. 62 © 2009 DeVry/Becker Educational Development Corp. All rights reserved. Maxixishere Pdf Collection Becker CPA Review, PassMaster Questions Lecture: Regulation 3 CPA-02256 Type1 M/C 125. CPA-02256 A-D R98 #14 Corr Ans:...
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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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