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sweet-ann [11.9K]
3 years ago
15

In year 1, Maxim sold investment land with a tax basis of $77,000. Payment consisted of $10,000 cash down and the purchaser's no

te for $90,000. The note is payable in equal installments of $45,000 in years 2 and 3. Compute Maxim's realized gain on the sale of the land. Compute Maxim's gross profit percentage on the sale of the land under the installment sale method. Compute Maxim's recognized gain under the installment sale method in years 1, 2, and 3.
Business
1 answer:
ASHA 777 [7]3 years ago
5 0

Answer:

a) Realized gain on the sale of land = Selling price – tax basis

=> $100,000 - $77,000 = $23,000

b) Gross profit percentage as per instalment sale method = Gross profit / Sales

=> $23,000/$100,000 = 0.23 or 23%

c) Recognized gain under instalment sale method = Cash collection x gross profit percentage

Year 1 => $10,000 x 23% = $2,300

Year 2 => $45,000 x 23% = $10,350

Year 3 => $45,000 x 23% = $10,350

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And, there is a production of 400 MP3 players

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3 years ago
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frez [133]

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olga_2 [115]
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A perfectly competitive firm is a price taker, which means that it must accept the equilibrium price at which it sells goods. If a perfectly competitive firm attempts to charge even a tiny amount more than the market price, it will be unable to make any sales.
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Option B is correct one.

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