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SSSSS [86.1K]
3 years ago
7

Q8. Smith Auto Dealership had beginning net fixed assets of $216,525 and ending

Business
1 answer:
AveGali [126]3 years ago
5 0

Answer:

The net cash flow is $7,844 from the sale of the assets.

Explanation:

<em>Step 1: Determine the average fixed assets</em>

The average net fixed assets can be determined using the expression;

Av=(Fb+Fe)/2

where;

Av=average net fixed assets

Fb=net fixed assets at the beginning of the year

Fe=net fixed assets at the end of the year

In our case;

Av=unknown

Fb=$216,525

Fe=$208,650

replacing;

Av=(216,525+208,650)/2=$212,587.50

The average net fixed assets=$212,587.50

<em>Step 2: Determine the net fixed assets after accounting for depreciation</em>

This can be expressed as;

Net fixed assets=average net fixed assets-depreciation

where;

average net fixed assets=$212,587.50

depreciation=$41,320

replacing;

Net fixed assets=(212,587.50-41,320)=$171,267.50

Step 3: Debit the fixed asset account and credit the cash account

Account                                Debit                    Credit

Fixed assets                        7,844                   163,423.50

Cash flow                        163,423.50                  7,844

The net cash flow is $7,844 from the sale of the assets.

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The available options are:

A. No capital gain or loss because the item sold was personal property

B. $2,500 long term capital gain

C. $12,500 long term capital gain

D. $22,500 long term capital gain

Answer:

$2,500 long term capital gain

Explanation:

Given that the classic car, that is an item under consideration is inherited, therefore, the cost basis to the recipient is the market value at the date of death.

Hence, the market value of the date of death is $20,000

The amount the classic car is sold is $22,500

To get the capital gain or loss, subtract the value at the date of death from the amount sold, which is $22,500 - $20,000 = $2,500

Hence, the correct answer is $2,500 long term capital gain

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3 years ago
A property has a restriction dating back to the 1920s that limits the sale of the property to persons of a particular race. The
Bezzdna [24]

The restriction on the building to prevent sale to persons of a particular race means it is unenforcable but the sale can go through.

Restrictions like this are unconstitutional because it is promotes discrimination of some race.

  • Also, it is also unconstitutional to enforce a racially restrictive covenant although the existence does not prevent the conveyance going through.  

.

  • Hence, the restriction on the building to prevent sale to persons of a particular race means it is unenforcable but the sale can go through

Therefore, the Option C is correct.

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<em>brainly.com/question/1860153</em>

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2 years ago
Cory owns a custom purse-design business. He launched an advertising campaign featuring purses made of environmentally friendly
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Answer:

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Based on the scenario being described within the question it can be said that the Cory's final goal in this scenario is to build brand loyalty. This term refers to when customers decide to purchase a brand's product over other competitor's products due to them having had great purchasing experiences with that company.

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3 years ago
Tamarisk Company uses the LCNRV method, on an individual-item basis, in pricing its inventory items. The inventory at December 3
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Answer:

See explanation section

Explanation:

Give

The cost value for each of the inventory item is as follows:

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D                        $88

E                        $94

F                        $94

G                        $94

H                        $59

I                          $42

Now, we determine the net realizable value for each of the product:

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D                       $93

E                        $73

F                        $70

G                        $41

H                        $82

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D                        $88

E                        $73

F                        $70

G                        $41

H                        $59

I                          $42

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