Sale of an capital assets
Q: Capital Expenditure and Depreciation
A: Carpet purchased is to be treated as a furniture under the heading of fixed assets.
Q: Depreciation represents a __________ in the value of fixed assets.
A: Fixed assets are those type of assets which are being held by the business for longer period of…
Q: Describe the Capital Expenditure process
A: Capital expenditure as the term suggest is a one time usually a balance sheet item. Usually a…
Q: Explain rate of return on total assets.
A: Accounting Ratio: It refers to a number expressed in terms of another to establish relationship…
Q: Explain financial asset held for trading
A: There are many types of assets held by a firm on its balance sheet. Each type of asset has different…
Q: What is return on assets(roa)?
A: In general terms, ROA is similar to Return on Investment.
Q: How can you explain working capital management? Explain different policies/approaches to manage…
A: The working capital is the capital that is used in the business for successful running of day to day…
Q: Asset utilization ratios describe how capital is being utilized to buy assets
A: Assets refer to the resources that the company owned in the organization and utilized for the…
Q: what is return on assets?
A: Return on Assets (ROA):- It is an indicator of how profitable a company is relative to its total…
Q: Describe classifications of long term assets.
A: Long-term assets: Long – term assets are those assets that are generally held by a company for more…
Q: revaluation or restatement of assets and liabilitie:
A: Equity is calculated by deducting total liabilities from total assets. It can be more clearly…
Q: Another name for a capital expenditure is: O Revenue expenditure O Asset expenditure O Long-term…
A: Capital Expenditure: A payment for goods or services that is reported on the balance sheet rather…
Q: Define non operating investment assets.
A: A non-operating investment asset is a class of assets that are not essential to the ongoing…
Q: 2. Which of the following best explains the meaning of the term 'capital expenditure'. Capital…
A: Capital expenditure is the long term expenditure of the company.
Q: Amortization of the cost of an intangible asset will most like affect which activity of the…
A: Amortization of an intangible asset does not result in any cash flow (receipt or payment).
Q: What is the total loss on realization of assets?
A: Loss that is recognized when the assets are sold for a price is lower than the original purchase…
Q: What are the Required disclosures about each major class of capital assets?
A: Capital asset refers to the assets with a longer useful life i.e. more than a year and is not…
Q: Return on assets
A: Return on assets is computed as net income upon total assets of the company.
Q: Define a financial asset
A: A contractual financial instrument is classified into financial assets and liabilities. They are an…
Q: Determine the Total Assets value
A: Assets show the company's balance and the valuable resource controlled by the company. Assets can be…
Q: Distinguish between the accounting for capital expenditures and revenue expenditures.
A: Fixed Assets: It refers to the long-term assets having a useful life of more than a year which is,…
Q: Working Capital Management is concerned with management of Select one: a. Long term capital b.…
A: Working capital management helps to ensure smooth operations of the business.
Q: Elaborate the term: “De-recognizing” financial assets
A: Financial asset is a form of liquid asset for the business. These assets gets its value from the…
Q: Real property held for investment is a capital asset. True or false
A: Real Estate Property Held for Investment is A capital Assets. Real estate property held for…
Q: Sale of an capital assets is subject to
A: Option a is wrong because regular income tax is applied in case of income from salary, business or…
Q: Explain return on assets (ROA)
A: The formula to compute return on asset as follows:
Q: Return on Total Assets
A: Return on Investment: Return on Investment is a measure of how well the company is performing using…
Q: Borrowing cost can be capitalized as cost of the assets when
A: Borrowing costs are costs related to amount borrowed or loans taken. This is the interest expense…
Q: Define how to record capital expenditure.
A: Capital expenditure: It refers to the amount spent on acquiring, maintaining, and improving the…
Q: Capital expenditure involves: Select one: O a. Exchange of current liabilities to acquisition of…
A: Assets can be divided into two parts fixed assets and current assets, fixed assets are the assets…
Q: acquiring capital assets for future use is one type of capital expenditure proposal. true or false
A: Capital expenditure (or capex) refers to those expenditures that are incurred by a company for…
Q: What is operating current assets financing policy?
A: Operating current assets are those assets that are held for short period of time and used in the…
Q: capital expenditure or a revenue expenditure.
A: Answer – Capital expenditures are those expenditure which improves the performance of assets and…
Q: Asset Turnover
A: We know that asset turn over is the amount of sales generated by each dollar value of assets engaged…
Q: Why is the cost of a lump-sum purchase allocated to the individual assets acquired?
A: It is necessary to allocate a lump sum purchase to individual assets in order to record a fair…
Q: compare ordinary assets from capital assets
A: Ordinary Assets:- A per tax code Ordinary Assets are the assets which are held by the tax payer for…
Q: Define the term capitalize.
A: Plant Assets: Plant assets are referred to the long-term and tangible assets that business use in…
Q: The capital account to be credited to Elor
A: There are 4 partner in Partnership firm sharing profit ratio 2:2:2:4. Out of these four partner Sam…
Q: Capital expenditures incurred subsequent to purchase of property assets increase total assets.…
A: Capital expenditures are incurred to make the property asset more efficient. It increases the…
Q: Example of Capital Allocation Line (CAL)
A: Capital allocation line: Capital allocation line is also named as capital market line. Capital…
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- Definitions The FASB has defined several terms in regard to accounting for income taxes. Below are various code letters (for terms) followed by definitions. Code Letter Term Code Letter Term A. Future deductible amount H Deferred tax consequences B Income tax payable (or refund) I Future taxable amount Operating loss carryback Deferred tax liability D Valuation allowance K Temporary difference E Deferred tax asset Income tax expense (or benefit) F Operating loss carryforward M Deferred tax expense (or benefit) Taxable income Required: Indicate which term belongs with each definition by choosing the correct term. 1. The deferred tax consequences of future deductible amounts and operating loss carryforwards 2. A difference between the tax basis of an asset or liability and its reported amount in the financial statements that will result in taxable or deductible amounts in future years when the reported amount of the asset or liability is recovered or settled, respectively X 3. Temporary…1. The amount of income taxes that relate to financial income subject to tax is reported on the income statement as A. long-term deferred income taxes (credit) C. income tax expense B. current deferred income taxes (debit) D. income tax payable 2. An item that would create a permanent difference in pretax financial and taxable income would be A. using accelerated depreciation for tax purposes & straight line depreciation for book purposes. B. using the percentage of completion method on long-term construction contracts. C. purchasing equipment previously leased with an operating lease in prior years. D. paying fines for violation of laws. 3. Which of the following is the most likely item to result in a deferred tax asset? A. using completed contract method of recognizing construction revenue tax purposes, but using percentage of completion method for financial reporting purposes. B. using accelerated depreciation for tax purposes but straight-line depreciation for accounting purposes.…27. Which of the following is a type of regular income tax a. Individual Income tax b. Corporate Income Tax c. Mixed Earner Income Tax O d. Both A and B 28. A taxpayer using GAAP cash - basis on a calendar year shall compute the taxable income using * a. Tax cash basis on a calendar year b. Tax cash basis on a fiscal year c. Tax accrual basis on a calendar year d. Tax accrual basis on a fiscal year
- 37. Sale of an capital assets is subject to O a. Regular Income tax O b. Capital Gains Tax O c. Excise Tax O d. Final income TaxAccounting profit is O A. The The profit or loss is for a period determined before deducting in accordance tax expense O B. The profit or loss is for a period determined in accordance with tax law C. The profit or loss after for a period after deducting tax expense O D. The profit or loss after current tax expense determined accordance with tax lawWhat is the taxable base for federal income taxes? a. Gross income b. Net worth c. Total assets d. Total debt
- I. Compensation and business income are returnable income that are subject to final income tax. II. When a taxable income is subjected to final tax, that income shall be excluded in the computation of taxable net income subject to basic income tax under the graduated tax rate. a. TT b. FF c. TF d. FTProperty taxes are considered: a. imposed tax revenues. b. derived tax revenues. c. voluntary nonexchange transactions. d. exchange transactions.After tax cost of interest deals with the fact that interest is deductible for tax purposes. Therefore, the after-tax cost of interest is calculated by, A. Calculating the income tax of a corporation before depreciation B. Comparing interest to net income C. Interest expense times (1- tax rate) D. Interest expense times the tax rate
- Which of the following can be deducted as interest expense? Interest on personal debt Interest on debt from a related creditor Imputed interest on capital Interest on assessed tax delinquency ANSWER:Statement 1: Life insurance premiums shall be reported as a deductible expense for financial reporting purposes if the company paying it is the beneficiary. Statement 2: Life insurance premiums shall be reported as a deductible expense for taxation purposes if the company paying it is the beneficiary. Statement 3: The total income tax expense can be computed as financial income multiplied by the tax rate. Statement 4: Future taxable amounts should be deducted in determining the taxable income which will yield the deferred tax asset. Statement 5: Future deductible amounts should be deducted in determining the taxable income. Which statement/s are true?1. In computing the CURRENT tax asset or CURRENT tax liability, which tax rate is used? a. Current tax rate b. Future enacted tax rate c. Average tax rate d. Effective tax rate 2. In computing the DEFERRED tax asset or liability, which tax rate is used? a. Current tax rate b. Estimated future tax rate c. Enacted future tax rate d. Prior tax rate 3. It is the sum of the amount of income tax payable and deferred tax liability related to accounting income. a. Tax expense reported in the income statement b. Current tax expense c. Deferred tax expense d. Deferred tax benefit