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musickatia [10]
3 years ago
11

Steve Pratt, who is single, purchased a home in Spokane, Washington, for $347,500. He moved into the home on February 1 of year

1. He lived in the home as his primary residence until June 30 of year 5, when he sold the home for $705,000. (Leave no answer blank. Enter zero if applicable.) a. What amount of gain will Steve be required to recognize on the sale of the home
Business
1 answer:
Lana71 [14]3 years ago
6 0

Answer: $107,500

Explanation:

There is an "Exclusion of gain on sale of home" provision by the IRS that allows for a single tax payer to exclude up to $250,000 from the sale of their primary home. A home qualifies as primary if the owner has lived in it for 2 years or more so Steve's home here is a primary home.

The gain he received was:

= 705,000 - 347,500

= $357,500

From this gain, $250,000 can be excluded so total gain recognized:

= 357,500 - 250,000

= $107,500

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In 2007, the economy slipped in a recession that many called the worst since the Great Depression. This caused people to experie
Elis [28]

Answer:

an increase in equilibrium price and an indeterminate effect on equilibrium quantity.

Explanation:

An inferior good is a good whose demand increases when income falls and reduces when income rises.

If ramen is an inferior good, when income falls its demand would increase. This would lead to a rise in quantity and price.

An increase in the price of wheat would increase the cost of production of ramen. As a result, the supply of ramen would fall. Price would increase and supply would fall.

The combined effect would be an increase in equilibrium price but an indeterminate effect on equilibrium quantity.

I hope my answer helps you

3 0
3 years ago
What is the term for how much the insurance company will pay?
Annette [7]
C coverage because it’s money to pay for the accident etc.
4 0
2 years ago
Read 2 more answers
Last year a country’s real GDP grew by 4%, it’s inflation rate was 2.5%, and it’s government budget deficit was about $250 billi
Arturiano [62]

Answer:

d. 3.85 trillion

Explanation:

Step 1: Given data

GDP = GDP grew by = 4% = 0.04

R = inflation rate was = 2.5% = 0.025

D = government budget deficit was = $250 billion

Step 2: Formula

X = debt at the start of last year

X = D / (GDP + R)

Step 3: Computation

X = 250 billion / (0.04 + 0.025)

X = 250,000,000,000 / 0.065

X = 3,846,153,846,153.85

Step 4: Convert to trillion

X = 3,846,153,846,153.85 / 1,000,000,000,000

X = 3.85 trillion

The correct option is d. 3.85 trillion

Hope this helps!

5 0
2 years ago
On January​ 1, 2019, Castle Services issued $ 174 comma 000 of sixminus ​year, 12 ​% bonds when the market interest rate was 11
Marysya12 [62]

Answer: Debit: Interest expense $9900

Debit: Premium on bonds payable $540

Credit: Cash $10440

Explanation:

First and foremost, the cash payment will be calculated as:

= $174,000 × 12% × 6/12

= $174,000 × 0.12 × 0.5

= $10440

Interest expenses will be calculated as:

= $180000 × 11% × 6/12

= $180000 × 0.11 × 0.5

= $9900

Therefore, the journal entry to record the first interest​ payment would be:

Debit: Interest expense $9900

Debit: Premium on bonds payable $540

Credit: Cash $10440

8 0
2 years ago
On July 1, 2020, Pearl Co. pays $13,620 to Martinez Insurance Co. for a 3-year insurance policy. Both companies have fiscal year
Sati [7]

Answer:

Explanation:

The journal entry is shown below:

1st July Debit Prepaid insurance $13620

Credit Cash $13620

31st December Debit Insurance expenses $2270

Credit Prepaid insurance $2270

Insurance expense was calculated as:

= $13620/3 years × 6months/12months

= $4540 × 1/2

= $2270

8 0
2 years ago
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