The correct answer is B. A low inflation rate! I hope this helps you!
Answer:
$21000
Explanation:
To determine Gray’s tax basis for a 50% interest in the Fabco Partnership, The interest is increased by the partner’s distributive share of all partnership items of income and decreased by the partner’s distributive share of all loss and deduction items.
Gray’s beginning basis = $5,000
Gray’s 50% distributive share of ordinary income = 50% × $20000 = $10000
Gray’s 50% tax-exempt income= 50% × $8000 = $4,000 and
portfolio income = 50% × $4000 = $2,000
Therefore, the ending basis of Gray’s Fabco partnership interest = $5000 + $10000 + $4000 + $2000 = $21000
Answer:
Bill has $25,000 at-risk and he can also deduct $25,000 from his income due to the losses associated with his rental activity.
Explanation:
At risk amounts are the money that investors can lose due to a bad business decision or performance. The maximum amount that an investor can deduct is equal to the at-risk amount that he/she has invested.
Bill's at-risk $25,000 are equal to the money he spent on house repairs.
Answer:
C. Borrowing $43 at the risk-free rate and investing the total amount ($143) in the risky asset.
Explanation:
Outcome Return For $100 = (115 - 100)/100 = 15%;
0.15 = w1(0.12) + (1 - w1)(0.05)
0.15 = 0.12w1 + 0.05 - 0.05w1
0.10 = 0.07w1
w1 = 1.43($100)
w1 = $143;
(1 - w1)$100 = $100 - $143
(1 - w1)$100 = -$43
Answer:
Dept. Y = $18,200
Dept. Z = $21,800
Explanation:
Wages expense for this question consist of direct wages and indirect wages. The direct wages are allocated to their respective departments while the indirect wages are apportioned between the two departments.
Therefore, first do the allocation then the remainder $24,000 is apportioned equally between the two departments, Dept. Y and Dept. Z.
Dept. Y Dept. Z
<u>Departmental wage expenses :</u>
Direct wages $6,200 $9,800
Indirect wages $12,000 $12,000
Total $18,200 $21,800
