Song Company, a Calendar Year Taxpayer, Purchased a Total of $2,534,400

question 53

Multiple Choice

Song Company, a calendar year taxpayer, purchased a total of $2,534,400 tangible personalty in 2018. How much of this cost can Song elect to expense under Section 179? 

• A) -0-
• B) $1,000,000
• C) $2,534,400
• D) $965,600

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Definitions:

Net Sales

The amount of sales generated by a company after deducting returns, allowances, and discounts.

Allowance Method

A method of accounting that estimates and sets aside an amount for potentially uncollectible receivables.

Bad Debts

Receivables from accounts deemed not collectable, which constitute financial losses for the business.

Accounts Receivable Turnover

A financial ratio that measures how many times a company collects its average accounts receivable balance within a specific period.