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oee [108]
3 years ago
15

Gwen inherited 100 shares of supershoes stock when her mother died on october 21, 2015; the fair market value of the stock was $

20 per share. her mother paid $200 per share when she purchased the stock march 1, 2006. if gwen sells all 100 shares for $50 per share on july 3, 2017, how should she report the sale on her income tax return?
Business
1 answer:
Dafna1 [17]3 years ago
5 0

Answer: Gwen should report a $3,000 long-term capital gain in her income tax return.

In this question the price paid by Gwen’s mother for the shares is irrelevant because of her death.

The stock’s fair market value ($20) when Gwen inherited the shares (21st October 2015) is Gwen stepped up value.

Gwen’s gain from selling the shares is:

Gain / (Loss) = (Selling Price per share - Stepped up value per share) * Number of shares

Gain = (50 - 20) *100

Gain = $3,000

Gwen inherited the shares on (21st October 2015) and held the shares until (3rd july 2017), so she held the shares for more than one year after inheriting it.  So, she will report a long-term capital gain on her income tax return.

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3 years ago
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7 0
2 years ago
When the _____ value of debt is the same as its face value, it is said to be selling at _____ value.
Allushta [10]

Answer:

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8 0
3 years ago
Use goal seek to answer this question. All else equals, to have a net income of 20,000, the COGS margin percentage must be _____
Lelechka [254]

Answer:

Use goal seek to answer this question. All else equals, to have a net income of 20,000, the COGS margin percentage must be <u>40%</u>, and the gross profit must be <u>$17,250</u>.

Explanation:

The income statement is missing, so I looked it up and the information given was:

  • Revenue 100,000
  • COGS 40,000
  • Gross Profit 60,000
  • Salaries
  • Marketing
  • Rent
  • Earnings Before Tax 23,000
  • Income Tax 25%
  • Net Income ?

Since COGS are$40,000 and total sales are $100,000, the COGS margin percentage = 40,000 / 100,000 = 40%

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4 0
3 years ago
Calla Company produces skateboards that sell for $56 per unit. The company currently has the capacity to produce 95,000 skateboa
Tema [17]

Answer:

Calla Company

Three-column comparative Income Statement:

                                                  Normal         Special order       Total

Sales Revenue                       $4,580,800         $673,200     $5,254,000

Cost of sales:

Direct materials                      $ 981,600           $158,400       $1,140,000

Direct labor                                613,500              99,000            712,500

Overhead                                  954,000              76,973         1,030,973

Selling expenses                      558,000               84,151             642,151

Administrative expenses          477,000                  890            477,890

Total costs and expenses  $ 3,584,100           $419,414      $4,003,514

Net income                           $ 996,700         $ 253,786     $1,250,486

Explanation:

a) Data and Calculations:

Annual production capacity = 95,000 units

Actual annual production and sales = 81,800 units

Special order (units) = 13,200

Selling price (normal) = $56 per unit

Special order selling price = $51 per unit

Direct materials                      $ 981,600

Direct labor                                613,500

Overhead                                  954,000

Selling expenses                      558,000

Administrative expenses          477,000

Total costs and expenses  $ 3,584,100

Three-column comparative Income Statement:

                                                  Normal         Special order       Total

Sales volume                             81,800                  13,200         95,000

Selling price                                $56                     $51    

Sales Revenue                       $4,580,800         $673,200     $5,254,000

Cost of sales:

Direct materials                      $ 981,600           $158,400       $1,140,000

Direct labor                                613,500              99,000            712,500

Overhead                                  954,000              76,973         1,030,973

Selling expenses                      558,000               84,151             642,151

Administrative expenses          477,000                  890            477,890

Total costs and expenses  $ 3,584,100           $419,414      $4,003,514

Net income                           $ 996,700         $ 253,786     $1,250,486

1. Direct materials cost per unit = $981,600/81,800 = $12

2. Direct labor cost per unit = $613,500/81,800 = $7.50

3. Variable Overhead cost = $954,000/2 = $477,000

Variable overhead cost per unit = $477,000/81,800 = $5.83129

4. Variable selling expenses = 70% of $558,000 = $390,600

Variable selling expenses per unit = $390,600/81,800 = $4.77506

Additional selling expense per unit = $6.37506 ($4.77506 + $1.60)

Selling expense for special order = 84,151($6.37506 * 13,200)

5. Administrative expenses increased by $890

8 0
3 years ago
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