Indie Corporation Purchases a Building for Use in Its Business

question 1480

Multiple Choice

Indie Corporation purchases a building for use in its business at a cost of $100,000. The building was built in 1900 and is a certified historic structure. Indie spends $150,000 on qualifying renovations certified as consistent with the buildings character. Indie will earn a total rehabilitation (historic) tax credit of

• A) $50,000.
• B) $15,000.
• C) $25,000.
• D) $30,000.

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Definitions:

General Journal

A primary accounting record used to record all types of accounting transactions including both debits and credits.

Ledger

A book or collection of financial accounts.

Trial Balance

A bookkeeping report that lists the balances of all ledgers accounts in order to verify that debits equal credits.

Prepaid Expenses

Upfront costs incurred for items or services that are to be obtained in the upcoming time.