Question

ABC Company is incorporated and starts operations on July​ 1, 2020. On October​ 1, 2020​, it...

ABC Company is incorporated and starts operations on July​ 1, 2020. On October​ 1, 2020​, it acquires goodwill for $12,000. Assuming the company has a December 31 fiscal​ year-end, what is the maximum CCA for 2020​? Choose the correct answer. ​(Round the final answer to the nearest​ dollar.) A. $454 B. $227 C. $900 D. $302

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
Answer for the above question was
Option D: $ 302
Explanation was as follows
Capital Cost Allowance for goodwill was 5%
we need to apply 50% rule
Calculation:
Purchase cost of Goodwill - $12,000
Date of purchase : 01/10/2020
Fiscal year end : 31/12/2020
Max CCA for the year 2020 : $ 12,000*5% X 1/2 = $ 302
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
ABC Company Inc. is a new company that began operations on October 5th, 2019. The following...
ABC Company Inc. is a new company that began operations on October 5th, 2019. The following are the only events that have occurred since the company’s inception. REQUIRED: Prepare the Journal Entries, T accounts, Trial Balance as of 12-31-19, Balance Sheet as of 12-31-19 and the Income Statement for the year ended December 31st for ABC Company Inc. Lastly, please prepare the closing entries and the post closing trial balance. 10-05-19 John Smith, Sole Shareholder of ABC Inc, contributed $80,000...
On July 31, 2020, Sunland Company paid $2,850,000 to acquire all of the common stock of...
On July 31, 2020, Sunland Company paid $2,850,000 to acquire all of the common stock of Conchita Incorporated, which became a division (a reporting unit) of Sunland. Conchita reported the following balance sheet at the time of the acquisition. Current assets $750,000 Current liabilities $560,000 Noncurrent assets 2,550,000 Long-term liabilities 460,000    Total assets $3,300,000 Stockholders’ equity 2,280,000    Total liabilities and stockholders’ equity $3,300,000 It was determined at the date of the purchase that the fair value of the identifiable net...
On July 31, 2020, Oriole Company paid $2,750,000 to acquire all of the common stock of...
On July 31, 2020, Oriole Company paid $2,750,000 to acquire all of the common stock of Conchita Incorporated, which became a division (a reporting unit) of Oriole. Conchita reported the following balance sheet at the time of the acquisition. Current assets $730,000 Current liabilities $560,000 Noncurrent assets 2,450,000 Long-term liabilities 460,000    Total assets $3,180,000 Stockholders’ equity 2,160,000    Total liabilities and stockholders’ equity $3,180,000 It was determined at the date of the purchase that the fair value of the identifiable net...
On July 31, 2020, Mexico Company paid $3,000,000 to acquire all of the common stock of...
On July 31, 2020, Mexico Company paid $3,000,000 to acquire all of the common stock of Conchita Incorporated, which became a division (a reporting unit) of Mexico. Conchita reported the following balance sheet at the time of the acquisition. Current assets               $  800,000                               Current liabilities $      600,000 Noncurrent assets           2,700,000                               Long-term liabilities      500,000 Total assets                   $3,500,000                               Stockholders' equity   2,400,000                                                           Total liabilities and stockholders' equity $3,500,000 It was determined at...
On June 1, 2020, the Crocus Company began construction of a new manufacturing plant. The plant...
On June 1, 2020, the Crocus Company began construction of a new manufacturing plant. The plant was completed on October 31, 2021. Expenditures on the project were as follows ($ in millions): July 1, 2020 72 October 1, 2020 40 February 1, 2021 48 April 1, 2021 30 September 1, 2021 29 October 1, 2021 15 On July 1, 2020, Crocus obtained a $88 million construction loan with a 10% interest rate. The loan was outstanding through the end of...
On July 1, 2020, Premier Publishing Company decided to discontinue their "Book Publishing Division". On ล...
On July 1, 2020, Premier Publishing Company decided to discontinue their "Book Publishing Division". On ล Pre-Tax basis, the Book Publishing Division had an operating loss of $ 400,000 from January 1st throughJune 30th, and was anticipated to lose an additional $ 600,000 from July 1, 2020 through December 31, 2020. The carrying value of the Net Assets of the Book Publishing Division is $ 10,000,000, and the investment banker hired by Premier believes that the division will be sold...
ABC Company began operations on August 1, 2021 and entered into the following transactions during 2021:...
ABC Company began operations on August 1, 2021 and entered into the following transactions during 2021: 1. On August 1, ABC Company sold common stock to owners in the amount of $100,000 and borrowed $200,000 from the local bank on a 10-month, 12% note payable. 2. On September 1, ABC Company purchased a piece of equipment costing $80,000 by paying $50,000 in cash and agreeing to pay the remainder within six months. The equipment was assigned a 5-year life and...
ABC Company began operations on August 1, 2021 and entered into the following transactions during 2021:...
ABC Company began operations on August 1, 2021 and entered into the following transactions during 2021: 1. On August 1, ABC Company sold common stock to owners in the amount of $100,000 and borrowed $200,000 from the local bank on a 10-month, 12% note payable. 2. On September 1, ABC Company purchased a piece of equipment costing $80,000 by paying $50,000 in cash and agreeing to pay the remainder within six months. The equipment was assigned a 5-year life and...
The Westwood Cycle Company expects to start operations on July 1, 2020 and will sell bicycles...
The Westwood Cycle Company expects to start operations on July 1, 2020 and will sell bicycles out of its store that it recently leased in the town center. Westwood Cycle has budgeted sales for the month of July to be $12,000 of which 30 percent will be cash sales and 70 percent will be sales on account. Westwood Cycle expects a 15 percent increase in sales per month for August and September with the ratio of cash sales to sales...
ackson Company acquires 100% of the stock of Clark Corporation on January 1, 2020, for $4,100...
ackson Company acquires 100% of the stock of Clark Corporation on January 1, 2020, for $4,100 cash. As of that date Clark has the following trial balance: Debit Credit Cash $ 500 Accounts receivable 600 Inventory 900 Buildings (net) (5 year life) 1,600 Equipment (net) (2 year life) 1,000 Land 900 Accounts payable $ 400 Long-term liabilities (due 12/31/22) 1,900 Common stock 1,000 Additional paid-in capital 700 Retained earnings 1,500 Total $ 5,500 $ 5,500 Net income and dividends reported...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT