Joshua Purchased Business Furniture and Fixtures 7-Year Property)for $40,000 in May

question 54

Multiple Choice

Joshua purchased business furniture and fixtures 7-year property) for $40,000 in May 2013.On July 15,2016,Joshua sold the furniture and fixtures for $30,000.During his years of ownership,he had taken $27,504 of depreciation for regular tax purposes.AMT depreciation for that period was $17,276.What is the 2016 AMT adjustment required as a result of the sale of the assets?

• A)$7,276.
• B)$17,504.
• C)$0.
• D)$10,228.

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Definitions:

Accounts Receivable-Year 2

The amount of money owed to a company by its customers for goods or services delivered or used but not yet paid for in the second fiscal year.

Realized Gross Profit

The total profit a company makes from its sales after deducting the cost of goods sold, but only on transactions completed within the reporting period.

Deferred Gross Profit-Year 2

The portion of profit from installment sales recognized in the second year, not immediately at the time of sale, due to revenue recognition principles.

Cost Of Installment Goods Sold

The cost assigned to goods that have been sold on installment, including both the cost of manufacturing and a portion of interest on the installment sales.