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What book–tax distinctions in year 1 and also year 2 linked with its resources gains and also losses would certainly ABD Inc. report in the complying with different scenarios? Identify each book–tax difference as favorable or unfavorable and as long-term or short-lived.

You are watching: Arises from peripheral or incidental transactions.

A.

Year 1 Year 2
Capital gains $ 20,000 $ 5,000
Capital losses 8,000 0

Publication taxation distinction Favorable or Unfav Temp or permanent

Year 1

Year 2

b.

Year 1 Year 2
Capital gains $ 8,000 $ 5,000
Capital losses 20,000 0

Publication taxation difference Favorable or Unfav Temp or permanent

Year 1

Year 2

c.

Year 1 Year 2
Capital gains $ 0 $ 50,000
Capital losses 25,000

30,000

Book taxes distinction Favorable or Unfav Temp or permanent

Year 1

Year 2

d.

Year 1 Year 2
Capital gains $ 0 $ 40,000
Capital losses 25,000

0

Publication tax difference Favorable or Unfav Temp or permanent

Year 1

Year 2

e. Answer for year 6 only.

Years
Year 1 2 - 5 Year 6
Capital gains $ 0 $ 0 $ 15,000
Capital losses 10,000 0 0

Book tax distinction Favorable or Unfav Temp or permanent

Year 1

Year 2

f. Answer for year 7 only.

Years
Year 1 2 - 6 Year 7
Capital gains $ 0 $ 0 $ 15,000
Capital losses 10,000 0 0

Publication tax distinction Favorable or Unfav Temp or permanent

Year 1

Year 2


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Please deal with part 5 to 8

Kendra, Cogley, and Mei share revenue and loss in a 3:2:1 proportion.The partners have made a decision to liquiday their partnership. On theday of liquidation their balance sheet shows up ascomplies with.

KENDRA, COGLEY, AND MEIBalance SheetMay 31
Assets Liabilities andEquity
Cash $ 72,200 Accounts payable $ 251,000
Inventory 550,800 Kendra, Capital 74,400
Cogley, Capital 167,400
Mei, Capital 130,200
Total assets $ 623,000 Total liabilities andequity $ 623,000

Required:For each of the adhering to scenarios, finish the scheduleallocating the gain or loss on the sale of inventory. Preparejournal entries to record the below transactions. (Do notround intermediate calculations. Amounts to be deducted or Lossesmust be gotten in via a minus sign. Round your last answers tothe nearest totality dollar.)(1) Inventory is sold for $604,200.(2) Inventory is sold for $475,200.(3) Inventory is marketed for $301,800 and also any kind of partners with capitaldeficits pay in the amount of their deficits.(4) Inventory is offered for $282,000 and also the partners have actually no assetsother than those invested in the partnership.

5) Complete the schedule allocating the gain orloss on the sale of inventory is $301,800 and any partners withcapital deficits pay in the amount of their deficits.

Tip 1) Determicountry of Gain (Loss)
Proceeds from thesale of inventory $301,800
Inventory cost
Step 2) Alarea of the Gain (Loss) to the Partners.
KENDRA COGLEY MEI Total
Initialresources balances $74,400 $167,400 $130,200 $372,000
Allocation of gains (losses)
Capitalbalances after gains (losses)

6) a) Record the sale of inventory.

b) Allocate the gain(loss) on the sale of inventory to thepartners.

c) The partner(s) via deficit balances repay the amount oftheir deficit(s).

d) Record the payment of the liabilities.

e) Record the disbursement of the remaining cash to thepartners.

7) Complete the schedule allocating the gain orloss on the sale of inventory $282,000 and also the partners have noassets various other than those invested in the partnership.

Tip 1) Determination of gain (loss)
Proceeds from thesale of inventory $282,000
Inventory Cost
Tip 2) Alarea of the obtain (loss) to the partners andcirculation of deficit(s)
KENDRA COGLEY MEI Total
Initialresources balances $74,400 $167,400 $130,200 $372,000
Alplace of gains (losses)
Capital balancesafter gains (losses)
Alplace ofdeficit balance
Capitalbalances after deficit allocation

8) a) Record the sale of inventory for$282,000.

b) Record the alarea of the obtain or loss on the sale ofinventory to the partners.

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c) Assuming that the partners have no assets other than thoseinvested, alsituate any partner(s) deficit balances to the remainingpartners.