Answer:
a. Tax basis $550,625
b.Three years
c. $245,000
d. Three years
Explanation:
a. Calculation to determine Lance’s tax basis in his LLC interest
Lance’s tax basis in his LLC interest will be $550,625 ( $245,000+$305,625)
Based on the information given Lance’s basis in his LLC INTEREST is been made up of the amount of $245,000 basis of the investment property he transferred to the LLC including his $305,625 share which is calculated as ($407,500 x 75%) of the LLC debt reason been that LLC general debt obligations are tend to be treated as NON RECOURSE DEBT which is why Lance’s profit sharing ratio is used to allocate a portion of the LLC debt to him.
b. Based on the information given Lance's Holding period in his interest is THREE YEARS in which Lance had been holding investment property.
c. Cloud Peak’s basis in the contributed property will be Basis of $245,000
d. Cloud Peak’s holding period in the contributed property is THREE YEARS.
Answer:
She should pay $22,819 for this investment.
Explanation:
A fix Payment for a specified period of time is called annuity. The discounting of these payment on a specified rate is known as present value of annuity.
Formula for Present value of annuity is as follow
PV of annuity = P x [ ( 1- ( 1+ r )^-n ) / r ]
Where P = Annual payment = $5,000
r = rate of return = 12%
n = number of years = 7 years
PV of annuity = $5,000 x [ ( 1- ( 1+ 0.12 )^-7 ) / 0.12 ]
PV of Annuity = $22,818.78
Answer:
Benton Island, Inc.
Operating Activities Section of the Statement of Cash Flows for the year ended December 31, 2018 (using the direct method):
Cash from customers $80,000
Cash to Suppliers -85,000
Cash to Employees -50,000
Income Taxes -11,000
Net Cash flow from Operating -66,000
Explanation:
1. The operating activities section shows inflows and outflows of cash resulting from a company's key operating activities. Operating activities are different from the investing and financing activities of a firm. The investing activities section shows the investments in assets and other entities made by the company, while the financing activities section shows how the company is funded and the repayments made to fund providers in principal and interest.
2. The operating activities section can be prepared using two methods: the direct and the indirect methods. The direct method starts by identifying the cash receipts and payments from operating activities. The indirect method starts with the operating income and makes adjustments for non-cash flows, like Depreciation.
