Discussion question 16 7 lo 2 in 2014 the taxpayer

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Discussion Question 16-7 (LO. 2)In 2014, the taxpayer became ineligible to use the cash method of accounting. At the beginning of the year, accounts receivable totaled $240,000, accounts payable for merchandise totaled $80,000, and the inventory on hand totaled $320,000.Enter the amount of the adjustment due to the change in accounting method and its effect on net income.Amount ofAdjustmentEffect onNet IncomeAccounts receivable$240000IncreaseAccounts payable80000DecreaseInventory320000IncreaseTotal adjustment$480000Increase5.Correct answer:earned before it is collectedcollectedwhen it is earnedof paymentYour answer:eBookDiscussion Question 16-5 (LO. 2)Under what conditions would the cash method of accounting be advantageous as compared with the accrual basis?
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Your answer:eBookDiscussion Question 16-10 (LO. 2)Samantha, an accrual basis taxpayer, subscribes to a service that updates a database used in her business. In December 2015, Samantha paid the $120,000 subscription for the period January 2015 through December 2016.Note: If an amount is zero, enter "0".Samantha's deduction for 2015 is $120000and $0for 2016.7.Correct answer:Your answer:eBookExercise 16-24 (LO. 4)In 2015, Skylar sold an apartment building for $20,000 cash and a $300,000 note due in two years. Skylar’s cost of the property was $250,000, and he had deducted depreciation of $150,000, $60,000 of which was in excess of what the straight-line amount would have been.Under the installment sales method, Skylar's total realized gain is $220000. In 2015, he recognizes § 1250 gain of $
Mason canceled a note issued by Emma (Mason's niece) that arose in connection with the sale of property. At the time of the cancellation, the note had a basis to Mason of $30,000, a face amount of $55,000, and a fair market value of $42,000.Presuming that the initial sale by Mason qualified as an installment sale, the cancellation results in gain of $
Your answer:eBookDiscussion Question 16-9 (LO. 2)Edgar uses the cash method to report the income from his software consulting business. A large publicly held corporation has offered to invest in Edgar's business as a limited partner.Which of the following is true if the new partnership is formed?

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