Answer:
$2,000 ordinary gain and $15,000 long term capital gains
Explanation:
Under the installment method, the taxpayer will recognize gains based on the installments that they actually receive, not the whole contract. This method is generally used for real estate transactions that involve installments payments during several years.
In this case, Mr A received $60,000:
$40,000 for inventory, so gain = $40,000 - $38,000 = $2,000 ordinary gain
$20,000 for real property (25% of transaction price) = $20,000 x [($40,000 - $20,000) x 25%] = $20,000 - $5,000 = $15,000 long term capital gains
As it applies to corporations, employee-owner separation means that many employees can be separated from organization as a result of resignation, removal, death, permanent incapacity, discharge or retirement and they as employee are not stockholders of the company for which they work.
For better understanding, lets explain ownership and control in firms
- Separation of Ownership and Control in firm is done by Shareholders. They hire managers to manage the firm on their behalf. Employee only work for shareholders. Employees can be separated from organization as a result of resignation, removal, death, permanent incapacity, discharge or retirement
From the above, we can therefore say that the answer that as it applies to corporations, employee-owner separation means that many employees can be separated from organization as a result of resignation, removal, death, permanent incapacity, discharge or retirement and they as employee are not stockholders of the company for which they work is true
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Answer and Explanation:
The Journal entry is shown below:-
Bad debts expense Dr, $2,000
To Accounts receivable-Hopkins $2,000
(Being write off is recorded)
Here we debited the bad debt expenses as it increased the expenses and we credited the accounts receivable as it reduced the assets so that the proper posting could be done
Answer:
see below
Explanation:
Opportunity cost is the sacrificed benefit by choosing a preferred option over others. The value of opportunity cost is the foregone benefit from the best alternative.
In this situation, the person had to choose between buying gas for the car or using that money to purchase food. Since the person opted to buy gas, they sacrificed having a meal for the rest of the day. The pleasure derived from eating is the opportunity cost for this person.
Answer:
The future value of an annuity (FVA) is $828.06
Explanation:
The future value of an annuity (FVA) is the value of payments at a specific date in the future based on the payments being recurring and assuming a discount rate. The future value of an annuity (FVA) is based on regular cash flow. The higher the discount rate, the greater the annuity's future value.
Where:
FVA is The future value of an annuity (FVA)
P is payment per period
n is the number of period
r is the discount rate
Given that:
P = $195
r = 4% = 0.04
n = 4 years
substituting values
The future value of an annuity (FVA) is $828.06
