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gogolik [260]
3 years ago
9

Jay sold three items of business equipment for a total of $300,000. None of the equipment was appraised to determine its value.

Jay's cost and adjusted basis for the assets are as follows: Col1 Asset Skidder Driller Platform Total Col2 Cost $230,000 120,000 620,000 $970,000 Col3 Adjusted Basis $40,000 60,000 0 $100,000 Jay has been unable to establish the fair market values of the three assets. All he can determine is that combined they were worth $300,000 to the buyer in this arm’s length transaction.How would Jay allocate the sale price and figure the gain or loss on the sale of the three assets?
Business
1 answer:
olasank [31]3 years ago
6 0

Answer:

Consider the following calculations

Explanation:

Step 1. Given information.

Asset        Cost        Adjusted Basis

--------------------------------------------------

Skidder   230,000      40,000

Driller       120,000      60,000  

Platform  620,000        0

-------------------------------------------------

Total         970,000      100,000

Step 2. Formulas needed to solve the exercise.

Allocation for each asset =  value sold * (adjusted basis / total)

Gain on sale = Sales price - Adjusted basis amount

Step 3. Calculation and Step 4. Solution.

Sales price is allocated on the basis of adjusted value.

  • Skidder = 300.000 * 40.000/100.000 = 120.000

  • Driller = 300.000*60.000/100.000 = 180.000

  • Platform = 300.000*0/100.000 = 0

Gain on sale = Sales price - Adjusted basis amount

                        = 300.000 - (40.000 + 60.000 + 0)

                        = 200.000

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According to the sticky-wage theory, the economy is in a recession because the price level has declined so that real wages are too high, thus labor demand is too low.

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At the end of a full year mary garber had $6248.95 in her saving account. If the rate of interest was 12.253%, how much money di
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Explanation:

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where:

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Answer:

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