ACC 497 Final Exam - Assignment

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C. The investor must use the fair-value method unless it can clearly demonstrate the ability to exercise significant influence over the investee. D. The investor should always use the fair-value method to account for its investment. 56. On December 31, 2008, Kean Company changed its method of accounting for inventory from weighted-average cost method to the FIFO method. This change caused the 2008 beginning inventory to increase by $420,000. The cumulative effect of this accounting change to be reported for the year ended December 31, 2008, assuming a 40% tax rate, is A. $420,000. B. $252,000. C. $168,000. D. $0. 57. Which of the following serves as the highest authority for tax research, planning, and compliance activities? A. Internal Revenue Code B. Income Tax Regulations C. Revenue rulings D. Revenue procedure To download the Week 2 Case Study Click ACC 497 Week 2 Case Study Assignment 58. The retail inventory method is based on the assumption that the A. final inventory and the total of goods available for sale contain the same proportion of high-cost and low-cost ratio goods. B. ratio of gross margin to sales is approximately the same each period. C. ratio of cost to retail changes at a constant rate. D. proportions of markups and markdowns to selling price are the same. 59. When an item of expense is paid and recorded in advance, it is normally called A. a prepaid expense. B. an accrued expense. C. an estimated expense.
D. a cash expense. REGULATION Section 4: Federal Taxation of Property Transactions 60. Antonio owns land held for investment with a basis of $28,000. The city of Lafayette exercises the right of eminent domain and Antonio receives a payment of $48,000. What is Antonio's realized gain? A. $0 B. $20,000 C. $28,000 D. $48,000 61. In April 2009 of this year, Emma acquired a machine for $50,000 for use in her business. The machine is classified as 7-year property. Emma elects out of bonus depreciation and does not expense the asset under Sec. 179. Emma's depreciation on the machine this year is A. $5,000. B. $7,145. C. $10,000. D. $50,000. 62. During the current year, a corporation sells equipment for $300,000 that it had purchased and placed in service in 2007. The equipment cost $270,000, and $60,000 of depreciation deductions was allowed. The results of the sale are A. ordinary income of $90,000. B. Sec. 1231 gain of $90,000. C. ordinary income of $60,000 and LTCG of $30,000. D. ordinary income of $60,000 and Sec. 1231 gain of $30,000. 63. Susie owns a ranch in Wyoming, which Pat offers to purchase. Susie is not willing to sell the ranch but is willing to exchange the ranch for an apartment complex in Louisiana. The complex is available for sale. Pat purchases the apartment complex in Louisiana from Jody and transfers it to Susie in exchange for Susie's ranch. The
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ACC 497 Final Exam - Assignment

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