Zhao Company Sold an Asset on the First Day of the Tax

question 132

Multiple Choice

Zhao Company sold an asset on the first day of the tax year for $500,000. Zhao's Federal tax basis for the asset was $300,000. Because of differences in cost recovery schedules, the state regular-tax basis in the asset was $350,000. What adjustment, if any, should be made to Zhao's Federal taxable income in determining the correct taxable income for the typical state?

• A) $0
• B) ($50,000)
• C) $50,000
• D) $150,000

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Definitions:

Make Deposits

The act of placing money into a financial account.

Pay Bills

The process of settling amounts owed for purchases, services, or utilities to vendors or suppliers.

Reports Center

A centralized location or platform where various types of business reports can be accessed, generated, or managed.

Vendors Center

A feature in accounting software that organizes and tracks transactions related to suppliers from whom a business purchases goods or services.