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zubka84 [21]
3 years ago
8

A married couple purchased their residence 5 years ago for $500,000. For 3 of the last 5 years, they rented out the property for

income, and lived in the house of 2 of those years. The clients sell the house for $800,000. How much of the gain is taxable?
Business
1 answer:
dimulka [17.4K]3 years ago
4 0

Answer:

taxable is $50,000

Explanation:

given data

purchased residence = $500000

sell house = $800000

to find out

How much of the gain is taxable

solution

we know that tax code permits the first $50000 of capital gain from sale of a personal residence to be excluded from tax for married couple

and residence can't rent out for more than 3 years of preceding 5 years

so owner use 2 years of past 5 years

and here

sold in $800000

so gain is = 800000 - 500000 = $300000

and here excluded from tax =  $300000 - $50000

excluded from tax =  $250000

so taxable is $300000 - $250000

taxable is $50,000

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A competitive market is a market in which
Alexandra [31]

Answer:

d. no individual buyer or seller has any significant impact on the market price.

Explanation:

A competitive market is a market in which there are many buyers and many sellers so that each has a negligible impact on the market price.

4 0
3 years ago
TP Inc. is a young start-up company. No dividends will be paid on the stock over the next 9 years, because the firm needs to plo
tatiyna

Answer:

$41.69.

Explanation:

P9 = Next dividend / Required rate - Growth rate

P9 = $5 / 8% - 2%

P9 = $5 / 6%

P9 = $5 / 0.06

P9 = $83.33

So, the stock price for 9th year is $83.33

Current stock price = P9 / (1 + Required rate of return)

Current stock price = $83.33 / (1+0.08)^9

Current stock price = $83.33 / (1.08)^9

Current stock price = $83.33 / 1.9990046271

Current stock price = 41.68574643115692

Current stock price = $41.69

Therefore, the current stock price is $41.69.

8 0
3 years ago
In January 2021, Vega Corporation purchased a patent at a cost of $200,000. Legal and filing fees of $50,000 were paid to acquir
ale4655 [162]

Answer:

c. $215,000

Explanation:

The computation of the amount charged to income is shown below:

But before that first we have to determine the book value as on Jan 2024 which is

Total patent cost

= $200,000 + $50,000

= $250,000

Amortized cost till year 2024 is

= ($250,000 ÷ 10 years) × 3 years

= $75,000

The three years is counted from 2021 to 2024

Now

Book value on Jan 2024 is

= $250,000 - $75,000

= $175,000

So,

Amount charged to income  is

= $175,000 + $40,000

= $215,000

6 0
3 years ago
If Project Repat were to acquire another firm that makes or sells similar products in similar markets, it would be an example of
SVEN [57.7K]

Answer:

b. Horizontal merger.

Explanation:

Project Repat is merging with a company that produces similar products to its own markets them in similar markets as well, this is an example of a horizontal merger that results in increased synergies between the similar firms and a greater market share opportunity.

Vertical mergers are usually not in the same industry. They would either be with the suppliers of Project Repat or customers who retail Project Repat's products.

Conglomerate is an example of diversification and usually the merging firms have different operations.

There are no information of clashes of any sort within the two  merging companies so it is uncertain whether this is a hostile takeover.

Hope that helps.

3 0
3 years ago
Certain adjusting entries made at the end of an accounting period are reversed at the beginning of the following period Required
frutty [35]

Answer:

No reversing entry is needed as they are all posted correctly

Explanation:

1. Rent Expense 1,000 Prepaid Rent 1,000

This entry is correct because it rent had been prepaid, then the entry would have been to debit 'Prepaid Rent'and credit Cash/Bank. However at the end of the period when rent is accrued, you debit 'rent expense' and credit 'prepaid rent'

2.Taxes Expense 1,750 Taxes Payable 1,750

This entry is correct because at the end of the period when Tax is accrued, you debit 'Tax expense' and credit 'Tax payable' because tax is always paid much later in a future period not the current period

3. Deferred Rent Revenue 1,550 Rent Revenue 1,550

This entry is correct because at the end of the period when rent income is earned, but has been paid for before: you debit 'Deferred Rent Revenue' and credit 'Rent Revenue' because (at least a portion of) the deferred rent revenue is now earned.

4. Salaries Expense 150 Salaries Payable 150

This entry is correct because at the end of the period when Salary is accrued, you debit 'Salary expense' and credit 'Salaries payable'

6 0
3 years ago
Read 2 more answers
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