Answer: $4,000 is ordinary income. No Capital gain
Explanation:
In 2017 and 2018, total Section 1231 losses are:
= 3,300 + 3,100
= $6,400
The Section 1231 gain in 2019 falls below the combined losses from the previous years of 2017 and 2018 so will not be counted as a capital gain as those losses are not yet being recaptured.
The entire $4,000 is therefore ordinary income.
Answer:
The answer is: Credit record to Accounts Receivable account
Explanation:
The Accounts Receivable account is an asset, usually it should be a current asset since it should be collected within a one year period. When assets increase, a debit record should be made. But in this case, the asset is decreasing since bad debts reduce the Accounts Receivable account. When an asset decreases, a credit record should be made.
Answer:
The correct answer is B
Explanation:
Inferior goods are those goods or kind of goods whose demand declines or decrease when the income of the person or customer increases or rises. In other words, it means that the inferior goods demand is inversely associate to the customer or consumer income.
So, in this case, the income rises by 8% and the quantity demanded for the ice cream declines or falls by 18%, then the vanilla ice cream would considered as the inferior good.
Answer:
Put options give the holder the right to sell the underlying stock to the seller of the put option.
Put options are advantageous when the price in the market falls below the strike price of the option because the buyer will be able to sell at above market value and make a profit.
The asking price for a strike price of $9.00 is listed to be $0.33 and this is the premium paid by the buyer of the Put Option.
<h2>
1. Return if stock sells for $8.00</h2>
= Amount received/ Amount spent
= (No. of shares * ((Strike price - Market price) - Premium paid) ) / (No. of share * premium)
= (2,300 shares * (($9.00 - 8.00) - 0.33))/ ( 2,300 * 0.33)
= 2.03
= 203 %
<h2>
2. Return if stock sells for $10.00. </h2>
As this is an option, the investor can decide not to sell to the seller. The market price is higher than the strike price so they will not sell to the seller of the option and the return will be;
= (No. of shares * - Premium paid) ) / (No. of share * premium)
= (2,300 shares * - 0.33)/ ( 2,300 * 0.33)
= -1
= -100 %
Answer:
This would be an example of contract manufacturing.
True
Explanation:
Contract manufacturing can be defined as an international agreement between two companies in different countries to manufacture a product for the other company. It involves the arrangement by one company to receive manufactured products from another company. Contract manufacturing can also be known as international outsourcing or international subcontracting. In the contract, the company that needs the products usually stipulates the specifications of the product. In some cases, depending on the contract requirements, the company can provide the raw materials to be utilized in manufacturing.
This type of contract also specifies the expected quality of the products, quantity of products and the date of delivery of the products. The contract also provides for the testing of the products to ascertain that the quality meets the standards of the contract. Furthermore, the contract also provides for compensation in case of breach of contract.
Contract manufacturing is usually considered when the cost of production in a foreign country is much lower than in the country that is outsourcing the production.
