Answer:
e. None of the above
Explanation:
The taxable asset purchases allows the individual to increase or step up the tax basis of acquired assets so as to reflect the price of the purchases made.
If one buy an assets, then he or she wants to allocate total purchase price in a way which gives a favorable postacquisition tax results.
In case of taxable asset purchases, the tax credits or the net operating losses cannot be transferred from the target firm to the acquiring firm.
Answer:
Journal entry to record the Sale of Patent
Debit : Cash $750,000
Credit : Patent at Book Value $120,000
Credit : Profit and Loss $630,000
Journal entry to record the Sale of Equipment
Debit : Cash $325,000
Debit : Profit and loss $75,000
Debit : Accumulated depreciation $150,000
Credit : Equipment at Cost $550,000
Explanation:
During a sale transaction the entity recognizes 1. The Cash Proceeds resulting from the sale, 2. The Profit or loss resulting from the sale, 3.The entity derecognizes the Cost or Book Value of the Asset as well as the Accumulated depreciation.
A profit of $630,000 has been earned as a result of the sale of the Patent, whereas a loss of $75,000 has been incurred as a result of sale of Equipment.
Answer:
Concept & example of Opportunity Cost
Explanation:
Opportunity Cost is the cost of next best alternative foregone, while choosing an alternative. This arises because of 'choice' problem, due to unlimited wants & limited resources - having alternative uses.
Eg : If I can have 2 chapatis or a bowl of rice. And, I eat a bowl of rice. Then, 'opportunity cost' of a rice bowl is - the next best available '2 chapattis' foregone for the former.
Answer:
it will be a net loss of 560,000
It is better to produce at a loss of 60,000 than a loss of 620,000
That's because, the Division cover a good portion of their allocate fixed cost.
Explanation:
The fixed expense are allocate cost. Are unavoidable cost It will remain even if the division is dropped.
The sales and variable cost will be zero.
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After posting the values, we calculate the differential income.
In this case it will be a loss for 560,000
