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2 years ago

Jessica is a one-third owner in Bikes-R-Us, an S corporation that experienced a $45,000 loss this year (year 1).

Business

1 answer:

Arlecino [84]2 years ago

3 0

Answer:

a. $15,000

b. $10,000 & $3,000

c. $3,000

Explanation:

a. The amount of loss deducted in a year will be equal to the stock basis in the company.

The excess amount of loss will be carry to the future years and deducted, if there is conditional stock basis in the company.

The amount is Jessica allowed to deduct in year 1: ($45,000 x 1/3) = $15,000

b. Her stock and debt bases in the corporation at the end of year 1:

=> Stock basis at the end of year 1: $10,000 - $10,000 = 0

=> Remaining amount of loss: $15,000 - $10,000 = $5,000 => Remaining loss: $5,000 - $3,000 = $2,000

So, Jessica has a suspended loss of $2,000 at the end of year 1

c. The profit is $12,000

Share of J: $12,000 x 1/3 = $4,000

Out of this $4,000, the $3,000 (one-third) will be its debt basis and $1,000 will be stock basis.

The amount of $2,000 loss will first be deducted from the stock basis and then from the debt basis.

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2 years ago

Today, you borrowed $3,200 on a credit card that charges an interest rate of 12.9 percent, compounded monthly. How long will it

miskamm [114]

Answer:

It will take me = 30.99 years to pay-off the borrowed amount paying $60.00 every month

Explanation:

SOLUTION:

Using the Formula: A = P(1+r/n) ${nt}$

Where:

A= $60.00;

P = $3,200.00;

r = 12.9%;

n = 12

t =?

Substituting the values into the Formula =

$60 = $3,200(1 + 12.9%/12) ${12t}$

= $60 = $3,200(1 + 12.9%/12) ${12t}$

= $60.00 = $3,200.00 (1 + 0.129/12) ${12t}$

= $60.00 = $3,200.00 (1 + 0.01075 ) ${12t}$

= $60.00 = $3,200.00 (1.01075 ) ${12t}$

= $60.00/$3,200.00 = $3,200.00 (1.01075 ) ${12t}$ /$3200.00

= 0.01875 = (1.01075) $12t$

= Using the law of logarithm

= log $A^{N}$ = Nlog A

=12tlog(1.01075) = log0.01875

= 12log(1.01075)/(1.01075) = log0.01875/log(1.01075)

= 12t = log(0.01875)/log1.01075

= 12t = 1.7270/0.04644

Divide 12 by both sides

=12t/12 = 371.88774/12

t= 30.9898

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You plan to invest in bonds that pay 6.0%, compounded annually. If you invest $10,000 today, how many years will it take for you

kati45 [8]

Answer:

The answer is 16 years.

Explanation:

The formula for calculating the value of an investment that is compounded annually is given by:

$V(n)=(1+R)^nP$

Where:

$n$ is the number of years the investment is compounded,

$R$ is the annual interest rate,

$P$ is the principal investment.

We know the following:

$25000=(1+0.06)^n \times 10000$

And we want to clear the value n from the equation.

The problem can be resolved as follows.

First step: divide each member of the equation by $10,000$ :

$\frac{ 25000}{10000}=(1+0.06)^n \times \frac{ 10000}{10000}$

$2.5=(1.06)^n$

Second step: apply logarithms to both members of the equation:

$log(2.5)=log (1.06)^n$

Third step: apply the logarithmic property $logA^n=n.logA$ in the second member of the equation:

$log(2.5)=n.log (1.06)$

Fourth step: divide both members of the equation by $log1.06$

$\frac{log(2.50)}{log (1.06)} =n$

$n= 15.7252$

We can round up the number and conclude that it will take 16 years for $10,000 invested today in bonds that pay 6% interest compounded annually, to grow to $25,000.

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