P2-4 Valley Corporation incurred the following expenditures in connection with t

Question

P2-4  Valley Corporation incurred the following expenditures in connection with the development of a new product:

    If Valley Corporation elects to expense research and experimental expenditures, determine the amount of the deduction for research and experimental expenditures.           

     $154,000
                                        $130,000
                                        $100,000
                                        $60,000
                                        None of the above

P2-6  Which of the following states does not impose an income tax on individuals?           

      Montana
                                        Wyoming
                                        North Carolina
                                        New York
                                        All of the above

P2-10  Valerie purchases a business for $650,000. The fair market value of the assets of the business are as follows:     

    What is Valerie's cost basis in each asset?           
      $450,000 equipment, $150,000 building, and $0 goodwill
                                        $379,167 equipment, $250,833 building, and $20,000 goodwill
                                        $450,000 equipment, $150,000 building, and $50,000 goodwill
                                        $379,167 equipment, $250,833 building, and $0 goodwill
                                        None of the above

Explanation / Answer

1.$130,000

North Carolina

$379,167 equipment, $250,833 building, and $20,000 goodwill

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