Tgw a calendar year corporation reported 3908000 net

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Business Law Today, Standard: Text & Summarized Cases
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Chapter 26 / Exercise 1
Business Law Today, Standard: Text & Summarized Cases
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7. TGW, a calendar year corporation, reported $3,908,000 net income before tax on its financial statements prepared in accordance with GAAP. The corporation’s records reveal the following information: TGW’s depreciation expense per books was $448,000, and its MACRS depreciation deduction was $377,900.TGW capitalized $678,000 indirect expenses to manufactured inventory for book purposes and $802,000 indirect expenses to manufactured inventory for tax purposes.
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Business Law Today, Standard: Text & Summarized Cases
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Chapter 26 / Exercise 1
Business Law Today, Standard: Text & Summarized Cases
Jentz/Miller
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TGW’s cost of manufactured goods sold was $2,557,000 for book purposes and $2,638,000 for tax purposes.Four years ago, TGW capitalized $2,250,000 goodwill when it purchased a competitor’s business. This year, TGW’s auditors required the corporation to write the goodwill down to $1,500,000 and record a $750,000 goodwill impairment expense.Compute TGW's taxable income by showing adjustments to book income (amount and direction +/−) to arrive at taxable income.
8. A&Z incurred $450,000 of capitalized costs to develop a uranium mine. The corporation’s geologists estimated that the mine would produce 900,000 tons of ore. During the year, 215,000 tons were extracted and sold. A&Z’s gross revenues from the sales totaled $689,000, and its operating expenses for the mine were $200,000. Calculate A&Z’s depletion deduction.
Chap 8:1. TPW, a calendar year taxpayer, sold land with a $535,000 tax basis for $750,000 in February. The purchaser paid $75,000 cash at closing and gave TPW an interest-bearing note for the $675,000 remaining price. In August, TPW received a $55,950 payment from the purchaser consisting of a $33,750 principal payment and a $22,200 interest payment.a.Compute gain realized on the sale.b.Compute gain recognized in the year of sale if TPW elects not to use the installment sale method of accounting. Compute TPW’s tax basis in the note at the end of the year.c.Compute gain recognized in the year of sale if TPW uses the installment sale method of accounting. Compute TPW’s tax basis in the note at the end of the year.Explanation

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