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Kay [80]
3 years ago
13

Sean and Jenny own a home in Boulder City, Nevada, near Lake Mead. During the year, they rented the house for 40 days for $3,000

and used it for personal use for 18 days. The house remained vacant for the remainder of the year. The expenses for the house included $14,000 in mortgage interest, $3,500 in property taxes, $1,100 in utilities, $1,300 in maintenance, and $10,900 in depreciation. What is the deductible net loss for the rental of their home (without considering the passive loss limitation)
Business
1 answer:
Dmitry_Shevchenko [17]3 years ago
8 0

Answer:

Sean and Jenny

The deductible net loss for the rental of their home is:

= $18,241.

Explanation:

a) Data and Calculations:

Number of days for rent of $3,000 collected = 40 days

Number of personal use of house = 18 days

Total number of days that the house was in use = 58 days

House Expenses:

Mortgage interest $14,000

Property taxes          3,500

Utilities                       1,100

Maintenance             1,300

Depreciation          10,900

Total expenses  $30,800

Proportion of house expense:

Rental use =       $21,241 (40/58 * $30,800) 69%

Personal use =   $9,559 (18/58 * $30,800)   31%

Total expense $30,800

The deductible net loss for the rental of their home is $18,241 ($3,000 - $21,241).

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On April 1, 2021, Parks Co. purchased machinery at a cost of $42,000. The machinery is expected to last 10 years and to have a r
german

Answer:

  • Depreciation for 2021 is $6,300 with book value of the machinery being $35,700.
  • For 2022, Depreciation is $7,140 with book value of $28,560.

Explanation:

The double-declining method is otherwise known as the reducing balance method and is given by the formula below:

Double declining method = 2 X SLDP X BV

SLDP = straight-line depreciation percentage

BV = Book value

SLDP is 100%/10 years = 10%, then 10% multiplied by 2 to give 20%

At Year 2021, 20% X $42,000 = $8,400/yearly

Remember, the machinery was purchased on April 1, 2021, so 9 months depreciation would be accounted for as: 9/12 x $8,400 = $6,300.

So, the book value of the machinery is $42,000 - $6,300 = $35,700 at December 31, 2021

At Year 2022, 20% X $35,700 ($42,000 - $6,300) = $7,140

So, the book value of the machinery is $35,700 - $7,140 = $28,560 at December 31, 2022

Accumulated depreciation expense for Years 2021 to 2022, under this method, is $13,440 (addition of all the yearly depreciation).

8 0
3 years ago
Keesha Co. borrows $200,000 cash on November 1 of the current year by signing a 90-day, 9%, $200,000 note. 1. On what date does
nalin [4]

Answer:

Explanation:

1. The maturing date of note will be 30 January 2019

( 29 days in November + 31 Days in December and 30 Days in January)

2. The interest expense would be

On this year:

= Principal × rate of interest × number of days ÷ (total number of days in a year)  

= $200,000 × 9% × (60 days ÷ 360 days)

= $3,000

( 29 days in November + 31 Days in December)

3. On next year:

= Principal × rate of interest × number of days ÷ (total number of days in a year)  

= $200,000 × 9% × (30 days ÷ 360 days)

= $1,500

(30 Days in January)

We assume 360 days in a year.  

4. (A) Cash A/c Dr $200,000  

             To Notes payable A/c $200,000  

(Being note is issued for cash)

(B) Interest expense A/c Dr $3,000

          To Interest payable A/c $3,000

(Being accrued interest adjusted)

(C) Interest expense A/c Dr $1,500

    Interest payable A/c Dr $3,000

    Notes payable A/c Dr $200,000

                             To Cash A/c $204,500

(Being cash is paid on maturity)

3 0
3 years ago
1. The pre-emptive right of a common stockholder is the right toa. share proportionately in corporate assets upon liquidation.b.
FromTheMoon [43]

Answer:

<em>The pre-emptive right of a common stockkolder is the reight to share proportionately in any new issues of stock of the same class. Letter B</em>

Explanation:

The pre-emptive right is a right belonging to existing shareholders of a corporation to avoid a involuntary dilution of their ownership stake by giving them the chance to buy a proportional interest of any future issuance of common stock.

4 0
3 years ago
The application of marketing strategies and practices not for profit but rather to change or create behaviors that have a benefi
Bumek [7]

Answer:

Nonprofit Organization.

Explanation:

The application of marketing strategies and practices not for profit but rather to change or create behaviors that have a beneficial impact on targeted individuals or society as a whole is known as Nonprofit Organization which is a business that has been allowed tax-exempt situation by the Internal Revenue Service (IRS) as it promotes a social belief and provides a public support. A nonprofit necessarily assist the public in any way, whether by offering goods, services, or a combination of both.

6 0
3 years ago
Roberts, which began business at the start of the current year, had the following data:Planned and actual production: 40,000 uni
UkoKoshka [18]

Answer:

Gross margin = $166,500

so correct option is C. $166,500

Explanation:

given data

Planned and actual production = 40,000 units

Sales = 37,000 units @ $15 per unit

Production costs

Variable = $4 per unit

Fixed = $260,000

Selling and administrative costs

Variable = $1 per unit

Fixed = $32,000

to find out

gross margin that the company would disclose on an absorption costing income statement

solution

we get here sale that is

Sales = 37000 ×  $15

sales = $555,000

and

cost of good sold is

cost of good sold is = variable cost per unit + fixed cost per unit

cost of good sold is = 4  + \frac{260000}{40000}

cost of good sold is = 10.5

so total cost of god sold = 37000 × $10.5

total cost of god sold = $388500

so Gross margin is here

Gross margin =  $555,000 - $388500  

Gross margin = $166,500

7 0
2 years ago
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