1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
seropon [69]
3 years ago
9

Eleven years ago, Lynn Inc. purchased a warehouse for $315,000. This year, the corporation sold the warehouse to Firm D for $80,

000 cash and D’s assumption of a $225,000 mortgage. Through date of sale, Lynn deducted $92,300 straight-line depreciation on the warehouse.a. Compute Lynn’s gain recognized on sale of the warehouse.b. What is the character of this gain?c. How would your answers change if Lynn is a noncorporate business?
Business
1 answer:
steposvetlana [31]3 years ago
4 0

Answer:

gain recognized on sale = $82,300

ordinary gain =  $16,460

capital gain = $65,840

gain is $82,300

Explanation:

given data

purchased a warehouse = $315,000

sold warehouse = $80,000

assumption of a mortgage =  $225,000

deducted = $92,300

solution

first we get here Actual cost of warehouse that is

Actual cost of warehouse = Purchase cost - Depreciation    ..................1

put here value and we get

Actual cost of warehouse  = $315,000 - $92,300

Actual cost of warehouse = $222,700

and  

now we gain recognized on sale that is express as

gain recognized on sale = Sale price of warehouse + mortgage amount - actual cost   ..........................2

put here value and we get

gain recognized on sale = $80,000 +$225,000 - $222,700

gain recognized on sale = $82,300

and

now we get first we get ordinary gain and we know ordinary gain is the 20% of the gain amount

as the tax rate is 20%

so ordinary gain is

ordinary gain = $82,300 × 20%

ordinary gain =  16,460

so here capital gain will be

capital gain = Gain - Ordinary gain  ...................3

put here value  

capital gain = $82,300 - $16,460

capital gain = $65,840

and

when Lynn is a non corporate business than he will have only gain part of  $82,300 because here ordinary gain and capital gain is not recognized under non corporate business

so gain is $82,300

You might be interested in
The stated purposed of NAFTA is to A. gain membership in the WTO. B. reduce the outsourcing of jobs to foreign countries. C. pha
jekas [21]

Answer:

C. phase out all trade and tariff barriers among​ Canada, Mexico, and the U.S

Explanation:

The North American Free Trade Agreement (NAFTA)

This agreement creates a bloc of trade for the region, Canada, Mexico and the US.

As state on "C" It result in the elimination or reduction of barriers to trade and investment between the countries.

It will be replaced in the following year by the United States–Mexico–Canada Agreement (USMCA)

But NAFTA will keep working until this new agreement is finished.

4 0
3 years ago
Government-regulated maximum rent levels are an example of what? A. price floors B. public good C. rationing D. price ceilings
OLga [1]

D. Price ceiling

This is a government regulation that establishes a maximum price for a specific thing.

3 0
3 years ago
2. Describe one long-term goal that you have and at least two things you will need to do in order to accomplish that goal.
Artist 52 [7]

Answer:

be a music producer

Explanation:

3 0
3 years ago
When reporting on conditions relating to an entity's internal control observed during an audit of the financial statements, the
Alinara [238K]

Answer:

a Description of tests performed to search for material weaknesses.

Explanation:

When reporting on conditions relating to an entity's internal control observed during an audit of the financial statements, the auditor should include a Description of tests performed to search for material weaknesses.

Tests of controls may be performed to test the effectiveness of certain controls that auditors consider relevant to preventing and detecting errors and fraud that are material to the financial statements, <u>thereafter a management report must be issued to the audit committee for any deficiencies in controls to be addressed.</u> The management letter describes the tests performed and the results in each category

3 0
3 years ago
Which of the following is true? When companies employ push-down accounting:A) the subsidiary revalues assets and liabilities to
kondor19780726 [428]

Answer: The correct answer is A) The subsidiary revalues assets and liabilities to their fair values as of the acquisition date.

Explanation: Push down accounting is used when a company buys another company. This type of accounting revalues the assets and liabilities of the acquired company at a fair value on the date of acquisition.

4 0
3 years ago
Other questions:
  • The elimination of organizations that operate between the producer and the consumer is called
    7·1 answer
  • 5. Consider the supply chain involved when a customer orders a book from Amazon. Identify the
    13·1 answer
  • Based on the following information, what amount would be subtracted from the bank balance side of a checking account reconciliat
    14·1 answer
  • Opunui Corporation has two manufacturing departments--Molding and Finishing. The company used the following data at the beginnin
    12·1 answer
  • A college raises its annual tuition by​ 25%, and its student enrollment falls by​ 3.5%. Compute the price elasticity of demand.
    10·1 answer
  • In the late 1800s, how did railroad monopolies create economic hardships for farmers?A. By claiming productive land for business
    8·1 answer
  • During November, TaskMaster purchased 208,000 pounds of direct materials at a total cost of $436,800. The total factory wages fo
    8·1 answer
  • When merchandise is returned for a refund or for credit to be applied to other purchases, the situation is called a(n)
    10·1 answer
  • Advertising a home for sale in a minority area exclusively in a paper aimed at that minority group would most likely be regarded
    14·1 answer
  • Porter's model of business activities includes ________, which are interactions across value activities.
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!