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erma4kov [3.2K]
3 years ago
12

Monty loaned his friend Ned $20,000 three years ago. Ned signed a note and made payments on the loan. Last year, when the remain

ing balance was $11,000, Ned filed for bankruptcy and notified Monty that he would be unable to pay the balance on the loan. Monty treated the $11,000 as a nonbusiness bad debt. Last year, before considering the tax implications of the nonbusiness bad debt, Monty had capital gains of $9,000 and taxable income of $45,000. During the current year, Ned paid Monty $10,000 in satisfaction of the debt. Determine Monty’s tax treatment for the $10,000 received in the current year.
Business
1 answer:
maks197457 [2]3 years ago
5 0

Answer:

the amount of $10,000 received for the previous bad debt deduction must be included in the current years income.

Explanation:

The account receivable that is previously been written off as uncollectible but received during the current tax year requires a reversal of the write-off entry. however, if it was written off as uncollectible during the tax year then the tax benefit rule requires tha the income must be reported.

the amount of $10,000 received for the previous bad debt deduction must be included in the current years income.

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Answer:

Out of $15,000, the $13500 will be paid to preference stockholders and the remaining $1500 will be paid to equity stockholders

Explanation:

Given the information:

Rachel's Designs has 1,800 shares of 5%, $50 par value

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7 0
2 years ago
Shackleford corporation net income this year is $800,000. The company generally retains 35% of net income for reinvestment. the
ZanzabumX [31]

Answer:

A. $22.61

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First,

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3 years ago
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Answer: $6.2

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