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NikAS [45]
3 years ago
9

Karen owns City of Richmond bonds with a face value of $10,000. She purchased the bonds on January 1, 2018, for $11,000. The mat

urity date is December 31, 2027. The annual interest rate is 4%. What is the amount of taxable interest income that Karen should report for 2018, and the adjusted basis for the bonds at the end of 2018, assuming straight-line amortization is appropriate? $0 and $11,000 $0 and $10,900 $100 and $11,000 $100 and $10,900 None of the above
Business
1 answer:
Ainat [17]3 years ago
8 0

Answer:

amount of taxable interest income that Karen report for 2018 = 0

Amortization per year = $100

Adjusted basis  = $ 10,900

Explanation:

given data

face value = $10,000

purchased the bond = $11,000

interest rate = 4%

solution

we know here that City of Richmond bonds that is tax exempted

so that amount of taxable interest income that Karen report for 2018 = 0

and

as Premium on the bond is

Premium on the bond = purchased the bond - face value

Premium on the bond  = 11,000 - 10,000 = 1,000

and here time Period = 10 years  ( January 1, 2018 to December 31, 2027 )

so Amortization per year is

Amortization per year = \frac{1000}{10}

Amortization per year = $100

so

Adjusted basis will be = Purchase price - Premium amortized

Adjusted basis = 11,000 - 100

Adjusted basis  = $ 10,900

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8 0
1 year ago
Beginning inventory was $50,000. Inventory purchased during the year cost $75,000. Inventory on hand at year-end was $40,000. Co
marusya05 [52]

Answer:

The Cost of Goods Sold or COGS for the period was $85000

Explanation:

The cost of goods sold is the value or cost of inventory that has been sold off during the period. The Cost of Goods Sold of COGS can be calculated as follows,

COGS = Opening Inventory  +  Purchases  -  Closing Inventory

COGS = 50000  +  75000  -  40000

COGS = $85000

So, the Cost of Goods Sold or COGS for the period was $85000

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3 years ago
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2 years ago
New Town Instruments is analyzing a proposed project. The company expects to sell 1,600 units, ±3 percent. The expected variable
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Answer:

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$ 125,032

Explanation:

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TOTAL     Income Statement Unit   Quantity

$ 1,035,200 Total Net Sales       $ 647  1.600  

-$ 352,000 Variable Cost          $ 220  

-$ 64,000 Depreciation Expenses  

$ 619,200 Contributing Margin  

-$ 438,000 Anual Fixed Costs  

$ 181,200 Segment Margin  

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Quantity fall 3% from 1,600 to 1,552

Price Fall 2% from $647 to $634

Variable Cost Increase 2% from $220 to $224

Anual Fixed Cost Increase 2% from $438,000 to $446,760

Depreciation Expenses maintained at the same level.

TOTAL Income Statement Unit Quantity

$ 984,061 Total Net Sales $ 634  1.552  

-$ 348,269 Variable Cost         $ 224  

-$ 64,000 Depreciation Expenses  

$ 571,792 Contributing Margin  

-$ 446,760 Anual Fixed Costs  

$ 125,032 Segment Margin  

0 0
3 years ago
Brett owns investment land located in Tucson, AZ. He exchanges it for other investment land. In which of the following locations
andriy [413]

Answer:

F. None of The Above

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4 0
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