Questions from Taxation

Q: Lester Inc. owns 55 percent of the outstanding stock of Marvin

Lester Inc. owns 55 percent of the outstanding stock of Marvin Corporation. The two corporations engage in numerous intercompany transactions that must be accounted for on both their financial stateme...

Q: For many years, Mr. K, the president of KJ

For many years, Mr. K, the president of KJ Inc., took the corporation’s most important clients golfing at The Links Golf Club several times a year. However, after the tax law was amended to disallow a...

Q: If a corporation purchases insurance on the life of its chief executive

If a corporation purchases insurance on the life of its chief executive officer and the corporation is named the policy beneficiary, the premium payments are nondeductible. If the officer’s spouse and...

Q: The manager of Firm Z, a new business that anticipates a

The manager of Firm Z, a new business that anticipates a steady growth in profits over the next decade, must decide between the cash method and the accrual method as the overall method for tax purpose...

Q: Discuss the reasons why the Section 179 election is more valuable to

Discuss the reasons why the Section 179 election is more valuable to small firms than to large firms.

Q: Discuss the strengths and weaknesses of the tax rule providing for 15

Discuss the strengths and weaknesses of the tax rule providing for 15-year amortization of the cost of business acquisition intangibles.

Q: Brillo Company uses the calendar year and the cash method of accounting

Brillo Company uses the calendar year and the cash method of accounting. On December 29, 2018, Brillo made the following cash payments. To what extent can Brillo deduct the payment in 2018? a. $50,000...

Q: On February 1, Mr. B purchased a business from Mr

On February 1, Mr. B purchased a business from Mr. and Mrs. S for a lump-sum price of $750,000. The business included the following balance sheet assets. Appraised FMV Accounts receivable $ ………………………...

Q: Corporation J manufactures electrical appliances. Corporation K provides architectural services.

Corporation J manufactures electrical appliances. Corporation K provides architectural services. During the year, both corporations paid $56,000 annual premiums to carry fire and casualty insurance on...

Q: Identify the tax and nontax issues that firms must consider in adopting

Identify the tax and nontax issues that firms must consider in adopting the LIFO method of accounting for inventories.