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McGraw-Hill's Taxation of Business Entities 3rd Edition by Connie Weaver, Brian Spilker, Edmund Outslay, John Robinson, Ronald Worsham, Benjamin Ayers, John Barrick
Edition 3ISBN: 9780077924522McGraw-Hill's Taxation of Business Entities 3rd Edition by Connie Weaver, Brian Spilker, Edmund Outslay, John Robinson, Ronald Worsham, Benjamin Ayers, John Barrick
Edition 3ISBN: 9780077924522 Exercise 10
Erin is considering switching her business from the cash method to the accrual method at the beginning of next year (year 1). Determine the amount and timing of her §481 adjustment assuming the IRS grants Erin's request in the following alternative scenarios.
a. At the end of year 0/beginning of year 1, Erin's business has $15,000 of accounts receivables and $18,000 of accounts payables that have not been recorded for tax purposes.
b. At the end of year 0/beginning of year 1, Erin's business reports $25,000 of accounts receivables and $9,000 of accounts payables that have not been recorded for tax purposes.
a. At the end of year 0/beginning of year 1, Erin's business has $15,000 of accounts receivables and $18,000 of accounts payables that have not been recorded for tax purposes.
b. At the end of year 0/beginning of year 1, Erin's business reports $25,000 of accounts receivables and $9,000 of accounts payables that have not been recorded for tax purposes.
Explanation
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a)
It is given that E has $15,000 accoun...
McGraw-Hill's Taxation of Business Entities 3rd Edition by Connie Weaver, Brian Spilker, Edmund Outslay, John Robinson, Ronald Worsham, Benjamin Ayers, John Barrick
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