AFM Holdings Co. purchased 15 acres of land with an office
building and warehouse on it...
AFM Holdings Co. purchased 15 acres of land with an office
building and warehouse on it for $2,000,000. The assets were
appraised at: land $1,000,000, building $600,000, and warehouse
$900,000. The assets were carried on the seller's books at: land
$800,000, building $500,000, and warehouse $700,000. At what cost
should the purchasing company record each of the assets?
Land, Building, Warehouse:
a. $1,000,000, $600,000, $900,000
b. $800,000, $480,000, $720,000
c. $800,000, $500,000, $700,000
d. $1,000,000, $500,000, $500,000
Kitty’s factory building, which has an adjusted basis of
$475,000, is destroyed by fire on April...
Kitty’s factory building, which has an adjusted basis of
$475,000, is destroyed by fire on April 8, 2020. Insurance proceeds
of $500,000 are received on June 1, 2020. She has a new factory
building constructed for $490,000, which she occupies on October 1,
2020. Assuming Kitty’s objective is to minimize her current-year
tax liability, calculate her recognized gain or loss and the basis
of the new factory building.
Application Question 2-5: An office building with an
actual cash value (ACV) of $300,000 is covered...
Application Question 2-5: An office building with an
actual cash value (ACV) of $300,000 is covered under a BPP, subject
to an 80 percent coinsurance provision.
What is the minimum amount of insurance that must be
purchased on this building on an ACV basis to avoid a coinsurance
penalty?
Assume that the owner purchased $180,00 coverage (ACV)
on the building. What amount would the owner be paid in the event
of a $100,000 covered loss (ACV) to the building? Disregard...
A large urban HMO purchases a vacant office building to house
expanded administrative functions for $500,000....
A large urban HMO purchases a vacant office building to house
expanded administrative functions for $500,000. The accountant,
working with their real-estate agent, has estimated the value of
the land at $125,000, with the remaining cost of $375,000 valued
for the building. Prior to using the building, renovations costing
$100,000 are completed. The renovated building has an estimated
useful life of 27.5 years, with no residual value. What is the
annual charge for depreciation?
Azalea Company began construction on a new office building on
Jan. 1 of this year. The...
Azalea Company began construction on a new office building on
Jan. 1 of this year. The building was completed on Sept. 30.
Expenditures were made of $200,000 on Jan. 1; $300,000 on Sept. 1;
and $300,000 on Dec. 31. The weighted average accumulated
expenditures are:
Group of answer choices
$500,000
$300,000
$350,000
$400,000
3. Mary owns an apartment building that has an adjusted basis of
$1,080,000 but subject to...
3. Mary owns an apartment building that has an adjusted basis of
$1,080,000 but subject to a mortgage of $320,000. Mary transfers
the apartment building to Gary, and receives from Gary $230,000 in
cash and an office building with a fair market value of $880,000 at
the time of the exchange. Gary assumes the $320,000 mortgage on the
apartment. The transfer is a like-kind exchange.
a) what is Mary’s realized gain/ loss?
b) what is Mary’ recognized gain/loss?
c) what...
9. Milan Company purchased land and an office building on March
1 for a combined cash...
9. Milan Company purchased land and an office building on March
1 for a combined cash price of $1,600,000. The land had a cost of
$940,000 and the building had a book value of $200,000 on the
seller's books. The land and building had fair market values of
$1,040,000 and $560,000, respectively on March 1. Milan made the
following entry at acquisition:
Land
...........................................................................................
940,000
Building
......................................................................................
1,000,000
Gain on Purchase
..............................................................
140,000
Accumulated Depreciation
................................................. 200,000
Cash
..................................................................................
1,600,000...
Roy exchanges a business building (adjusted basis of $130,000,
FMV of $160,000) for a building with...
Roy exchanges a business building (adjusted basis of $130,000,
FMV of $160,000) for a building with a fair market value of
$110,000 and an adjusted basis of $40,000 from Idea Corporation. In
addition, Roy receives equipment with a fair market value of
$50,000 (adjusted basis of $35,000) from Idea Corp. What is the
realized gain or loss for Roy? What is the recognized gain or loss
for Roy? What is Roy’s basis in the new building? What is Idea’s
realized...
Mike Brady purchased an office building on April 12, 2019, for
a total of $2.5 million...
Mike Brady purchased an office building on April 12, 2019, for
a total of $2.5 million of which $350,000 was the value of the land
on which the office building was located.
Also, Mike purchased 7-year class new
business equipment for $54,500 on May 11, 2019. He elects
not to immediately expense the equipment under
§179 and elects not to take the additional
first-year depreciation. Mike purchased no other business assets
during 2019.
Determine Mike’s depreciation on the office building...
Paul exchanges an apartment building in Wisconsin for Ringo's
apartment building in Florida. Paul's building has...
Paul exchanges an apartment building in Wisconsin for Ringo's
apartment building in Florida. Paul's building has a fair market
value of $500,000, is encumbered by a $200,000 mortgage, and has a
basis of $275,000. Ringo's building has a fair market value of
$350,000, is encumbered by a $50,000 mortgage, and has a basis of
$175,000. They each assume the mortgages on the properties
received. What are Paul and Ringo's bases in the new buildings
acquired?