ACCT323 connect quiz 3

Quiz 3

Kip started a wholesale store this year selling bulk peanut butter. In January of this year Kip purchased an initial five tubs of peanut butter for a total cost of $5,000. In July Kip purchased three tubs for a total cost of $6,000. Finally, in November Kip bought two tubs for a total cost of $1,000. Kip sold six tubs by year end. What is Kip's ending inventory under the FIFO cost-flow method?

17.

The MACRS recovery period for automobiles and computers is:

[removed]

3 years

[removed]

5 years

[removed]

7 years

[removed]

10 years

[removed]

None of these

18.

Each of the following is true except for:

[removed]	A direct involuntary conversion occurs when property taken under imminent domain is replaced with other property.
[removed]	Qualified replacement property rules are more restrictive than the like-kind property rules.
[removed]	An indirect involuntary conversion occurs when property is destroyed and insurance proceeds are used to purchase qualified replacement property.
[removed]	Losses realized in involuntary conversions are deferred.
[removed]	All of these are true.

19.

Which one of the following is not a requirement of a deferred like-kind exchange?

[removed]	The like-kind property to be received must be identified within 45 days.
[removed]	The exchange must be completed within the taxable year.
[removed]	The like-kind property must be received within 180 days.
[removed]	A third party intermediary is often used to facilitate the exchange.
[removed]	All of these.

20.

What is the primary purpose of a third-party intermediary in a deferred like-kind exchange?

[removed]	To facilitate finding replacement property.
[removed]	To help acquire the replacement property.
[removed]	To prevent the seller from receiving cash (boot) that will taint the transaction.
[removed]	To certify the taxpayer's Form 8824.
[removed]	All of these.

21.

Which of the following sections recaptures or recharacterizes only corporate taxpayer's gains?

[removed]

§291.

[removed]

§1239.

[removed]

§1245.

[removed]

Unrecaptured §1250 gains.

[removed]

None of these.

22.

Which of the following is not true regarding installment sales?

[removed]

Only gains are eligible for installment sale reporting.

[removed]

Depreciation recapture is deferred in an installment sale.

[removed]

The gross profit percentage is needed to determine the annual gain recognized.

[removed]

Stock sales are ineligible for installment sale treatment.

[removed]

None of these.

23.

Brad sold a rental house that he owned for $250,000. Brad bought the rental house five years ago for $225,000 and has claimed $50,000 of depreciation expense. What is the amount and character of Brad's gain or loss?

[removed]	$25,000 ordinary and $50,000 unrecaptured §1250 gain.
[removed]	$25,000 §1231 gain and $50,000 unrecaptured §1250 gain.
[removed]	$75,000 ordinary gain.
[removed]	$75,000 capital gain.
[removed]	None of these.

24.

Leesburg sold a machine for $2,200 on November 10^th of the current year. The machine was purchased for $2,600. Leesburg had taken $1,200 of depreciation deductions. What is Leesburg's gain or loss realized on the machine?

[removed]	$800 gain.
[removed]	$1,000 gain.
[removed]	$1,200 loss.
[removed]	$1,400 loss.
[removed]	None of these.

25.

Which of the following is not used in the calculation of the amount realized:

[removed]	Cash.
[removed]	Adjusted basis.
[removed]	Fair market value of other property received.
[removed]	Buyer's assumption of liabilities.
[removed]	All of these.

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