Wallace Owns a Construction Company That Builds Both Commercial and Residential

question 75

Multiple Choice

Wallace owns a construction company that builds both commercial and residential buildings.He contracts to build a residential building for $800,000, and for which he is eligible to use the completed contract method of accounting.In the current year for regular income tax purposes, Wallace does not recognize any gross income on the contract.Under the percentage of completion method, the income recognized under the contract would have been
$60,000.Wallace's AMT effect is:

• A)$0.
• B)$60,000 negative adjustment.
• C)$60,000 positive adjustment.
• D)$800,000 positive adjustment.

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Definitions:

Clean-Voided Specimen

A urine sample collected in the middle of urination to minimize contamination, used for diagnostic testing.

Credé's Procedure

A method used to manually express urine from the bladder by applying gentle, steady pressure on the lower abdomen.

Tuberculosis

A contagious bacterial infection that primarily affects the lungs but can spread to other parts of the body.

Acid-Fast Bacilli

Bacteria that are resistant to decolorization by acid-alcohol after being stained with certain dyes, used in the diagnosis of tuberculosis.