CHAPTER 8: DEPRECIATION, COST RECOVERY, AMORTIZATION, AND
1. Property which is classified as personalty may be depreciated.
2. The basis of cost recovery property must be reduced by at least the cost recovery allowa
1. The Township of Thomasvilles General Fund has the following net resources at year
$77,000 of prepaid insurance
$375,000 rainy day fund approved by the township governing board with
specific conditions for its use
$2,500 of supplies inventory
LO.1 According to the Supreme Court, would it be good tax policy to use income as
computed by financial accounting principles as the correct measure of income for
Federal income tax purposes? Explain.
2. LO.1 Compare and contrast the economists concept us
Heather, age 12, lives in the same household with her mother,
grandmother and uncle.
a.Who can qualify for the dependency exemption?
Depending on the circumstances, the mother, grandmother or uncle could possibly claim H
b.Who takes preference?
H passes t
AMTI= Positive adj. + Preferences + Taxable income PRIOR to exemption amount
Adjustments examples :
State income taxes
Medical expenses > Requires adjustments
Spread on exercise of incentive stock options
Interest on private activit
Objectives of the sales, purchase & production processes
o Primary objectives:
a) Process sales in a timely & efficient manner
b) Collect cash in a timely & efficient manner
a) Track sales of goods & services to customers
b) Filling c
Using the legend provided below, classify each statement as to the
taxpayer for dependencyexemption purposes.
a. Taxpayers son has gross income of $7,000
If the son is under 19 (24 if a student),
lives with the taxpayer more than of the year and provides
Nadia donates $4,000 to Eastern University's athletic department. The payment
guarantees that Nadia will have preferred seating near the 50 yard line.
a. assume that Nadia subsequently buys four $100 game tickets. How much can she
deduct as a chari
Nell and Kirby are in the process of negotiating their divorce
agreement.What should be the tax consequences to Nell and Kirby if
the following, considered individually, became part of the
a. In consideration for her one-half interest in the
Percent of Effort
Other Group Members
Total (must add up to 100%)
the method a company uses to account for the declining value of its assets.
Company XYZ bought a machine that helps them produce widgets.
The machine cost $30,000 and
is expected to last 10 years.
It's "salvage value" (the amoun
Here is what Ive found so far on why LinkedIn sold to Microsoft for 26.2 billion, which make it the largest
acquisition ever made by Microsoft.
One of the reasons I found is that LinkedIn didn't sell ads in the way people expected it. And now