ApliaanswerforincometaxCh-.docVIP

16- PAGE 18 2011 Comprehensive Volume/Solutions Manual Accounting Periods and Methods 16- PAGE 17 ? 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. ? 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 16- PAGE 1 ? 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. CHAPTER 16 ACCOUNTING PERIODS AND METHODS SOLUTIONS TO PROBLEM MATERIALS Status: Q/PQuestion/Learning Presentin PriorProblemObjectiveTopicEditionEdition 1 LO 1 Tax year: natural business year New 2 LO 1 Tax year: partnership Unchanged 2 3 LO 1 Tax year: personal service corporation Unchanged 3 4 LO 1 Restoration under claim of right doctrine and Unchanged 4 tax benefit rule 5 LO 1 Farming: special treatment Unchanged 5 6 LO 2 Cash basis: prepaid expenses New 7 LO 3 Change in accounting method: § 481 New adjustment 8 LO 2 Cash versus accrual method Modified 8 9 LO 2 Cash versus accrual method Unchanged 9 10 LO 2 Accounting method: timing of deduction Unchanged 10 11 LO 2 Use of reserves Unchanged 11 12 LO 4, 6 Installment method: benefits Unchanged 12 13 LO 4 Recognized gain: effects of mortgage Unchanged 13 assumed 14 LO 4, 6 Installment method: related parties Unchanged 14 15 LO 4, 6 Installment method: electing out Unchanged 15 16 LO 2, 5 Long-term contracts; crop method Unchanged 16 17 LO 5 Long-term contracts: length New *18 LO 1 Partnership tax year Unchanged 18 19 LO 1 Fiscal year: personal service corporation Unchanged 19 *20 LO 1 Change in tax year: short-period tax Modified 20 21 LO 2 Cash versus accrual method: tort and breach Unchanged 21 of contract 22 LO 2 Cash and accrual basis expenses and income Modified 2