Sales, property, and income are three types of ____

Western Bank & Trust purchased land and a building for the lump sum of $3 million dollars. To get the maximum tax deduction,

leonid [27]

Answer:

Explanation:

Because land never depreciates, Western Bank & Trust wanted to distribute a higher percentage of the purchase price to the building, rather than the land. By allocating 90% of the purchase price to the building, rather than a more accurate 70%, Western Bank & Trust increases the depreciation amount of the building each year. For tax purposes, the IRS requires that the Modified Accelerated Cost Recovery System (MACRS) be used as the depreciation method used by companies. Under this method, the IRS specifies the useful life for a specific asset. MACRS also ignores residual value of an asset at the end of its useful life. By stating that the building was worth 90% of the total purchase price, Western Bank is attempting to increase its tax deduction from the IRS, because only the building depreciates, not the land. This improper allocation of the total purchase amount violates GAAP principles, which require that accounting information be “relevant and have faithful representation.” The information must be “complete, neutral, and free from error” (Nobles, Mattison, & Matsumura, 2014). For Western Bank to provide complete, neutral, and free from error information, it should record the transaction honestly: 70% to the building, 30% to the land. This dishonest representation is harmful to the federal government in that it is allowing Western Bank to take more money than what it is owed. If these kinds of situations happen on a large scale, it could have a huge impact on the economy in general. Source: Nobles, T., Mattison, B., & Matsumura, E. M. (2014). Horngren's Accounting, 10th Edition. Pearson Education, Inc. Student 2

3 0

3 years ago

A manager should attempt to maximize the value of the firm by changing the capital structure if and only if the value of the fir

faust18 [17]

Answer:

Option a

Explanation:

In simple words, value maximization refers to the process under which the managers of an organisation tries to make or increase the existing economic profits, that is, the money left with the organisation after paying for the obligations of all the money providers including the lat in hierarchy, the equity shareholders.

Value maximization can be performed by changing the capital structure which affects the payment obligations. The value maximization affects all the stakeholders of the organisation therefore, the decision should be made by tasking into consideration them all.

6 0

3 years ago

How could government – sponsored grants for the private development of new technologies result in a lower national debt?

Svet_ta [14]

Answer: Making initial development private saves the government from funding all of the research.

Explanation:

A grant refers to an amount of money that is financial assistance thats given by the government or an organization to an individual or firm for a specific purpose. A grant is different from a loan as it isn't meant to be paid back.

Government award grants for the development of technologies, community projects, home insulation etc.

With regards to the question, a government – sponsored grants for the private development of new technologies may result in a lower national debt when the government makes the initial development private thereby saving the government from funding all of the research.

6 0

2 years ago

If a payment is directly deducted from your account, which type of card are you using?

larisa [96]

Debit Card im pretty sure

5 0

3 years ago

Read 2 more answers

Performance Obligation Fulfilled Over Time Philbrick Company signed a three-year contract to develop custom sales training mater

MAXImum [283]

Answer:

Philbrick Company

Performance Obligation Fulfilled Over Time

Computation of the revenue, expense, and gross profit:

Year Number of Development Sales Gross

Employees /Training Cost Value Profit

2019 150 $ 55,000 $165,000 $110,000

2020 250 70,000 275,000 205,000

2021 100 20,000 110,000 90,000

Total 500 $145,000 $550,000 $405,000

Explanation:

a) Data and Calculations:

Contract price = $1,100 per employee

No. of employees to be trained = 500

Total contract value = $550,000 ($1,100 * 500)

Expected Development and Training Costs:

Year Number of Development

Employees /Training Cost

2019 150 $ 55,000

2020 250 70,000

2021 100 20,000

Total 500 $145,000

6 0

3 years ago

Sales, property, and income are three types of _____.