1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
shtirl [24]
3 years ago
9

Carol and Dave each purchase 100 shares of stock of Burgundy, Inc., a publicly owned corporation, in July for $10,000 each. Caro

l sells her stock on December 31 for $8,000. Because Burgundy’s stock is listed on a national exchange, Dave can ascertain that his shares are worth $8,000 on December 31. Does the Federal income tax law treat the decline in value of the stock differently for Carol and Dave? Explain.
Business
1 answer:
tino4ka555 [31]3 years ago
8 0

Answer:

See below

Explanation:

From the above information, we can deduce that the stock owned by Carol and Dave falls in value by $2,000 I.e ($10,000 - $8,000) ; it is to be noted that Carol solely has realised and recognized loss of $2,000.

Here, one of the cogent factors that determines whether a sale has taken place is if realization has been effected. Here, stock sold by Carol qualifies as a disposition while the decline in the value of stock sold by Dave does not qualify as disposition.

With regards to the foregoing, we can conclude that the federal income tax law treat the decline in the value of the stock differently for Carol and Dave.

You might be interested in
Frankie's Chocolate Co. reports the following information from its sales budget: Expected Sales: July $ 90,000 August 110,000 Se
Cerrena [4.2K]

Answer:

$112,500

Explanation:

                                                 July       August         September  October

Credit Sales(90000*75%)       67,500  

                   (110,000*75%)                       82,500

                   (120,000*75%)                                          90,000

Cash Sales (120,000*25%                                            30,000

<em>Total Cash expected to be collected in September will be;</em>

Credit Sales of August      $82,500

Cash  Sales of September $30,000

Total cash expected to be collected in September =$112,500

4 0
3 years ago
Read 2 more answers
Companies A and B each have the same level of total assets, the same tax rate, and the same earnings before interest and taxes (
anygoal [31]

Answer:

a.Company A has a lower return on assets (ROA).

c.Company A has a lower times interest earned (TIE) ratio.

That is options a and c

Explanation:

For company A to have high debt ratio means it has a higher debt which will reduce earnings. Company A's earnings will be less than Company B's.

ROA= Net income/Total assets

Since Company A's income is less than Company B's ROA for Company A will be less than that for Company B.

TIE = Earnings before Interest and Tax/Interest

Due to higher debt of company A it's interest will be higher resulting in low TIE.

5 0
3 years ago
In a simple, closed economy (no government or foreign sector), disposable income increases from $2,000 to $3,000. If consumption
tamaranim1 [39]

Answer:

The marginal propensity to save is 0.4

Explanation:

The marginal propensity to save is 1 - marginal propensity to consume.

The marginal propensity to consume is the proportion of an increase in income that the consumers will spend from this increased income and the marginal propensity to save is the proportion of the increase in income that will be saved.

The marginal propensity to consume (MPC) = Change in consumption / change in income

The MPC = (2100 - 1500) / (3000 - 2000)  =  0.6

Thus, the marginal propensity to save is 1 - 0.6 = 0.4

8 0
3 years ago
According to F.A. Hayek, what is the fundamental economic problem facing society?
jenyasd209 [6]

Answer:

According to F.A. Hayek, the fundamental problem facing every society is how to use limited resources in the most optimal way possible.

Explanation:

To Hayek, this problem could not be fully solved by any society, but the best a society could do is to rely on the price system, only possible under a free market, to signal which uses were more optimal than others.

This is also the reason why F.A. Hayek, along with fellow Austrian economists Ludwing Von Mises, believe that socialism could not work: socialism, according to Hayek and Mises, destroyes the price system, and without it, society has no rational way to allocate resources in an optimal way.

8 0
3 years ago
For each of the following transactions or adjustments, indicate the effect of the transaction or adjustment on assets, liabiliti
Alja [10]

Answer:

a. Recorded $200 of depreciation expense.

depreciation expense 200 debit (-net income)

 accumulated depreciation  200 credit (-assets)

b. Sold land that had originally cost $9,000 for $13,000 in cash.

cash 13,000 debit +assets

  land             9,000 credit -assets

 gain on sale 4,000 credit +net income

c. Acquired a new machine under a financing lease. The present value of future lease payments, discounted at 11%, was $11,000.

machinery  11,000 debit +assets

 lease liability 11,000 credit +liability

d. Recorded the first annual payment of $2,800 for the leased machine (in part c).

lease liability 2,800 debit -liability

cash                     2,800 credit -assets

d. Recorded a $5,900 payment for the cost of developing and registering a trademark.

trademark 5,900 debit +assets

cash  5,900 credit -assets

e. Recognized periodic amortization for the trademark (in part e) using a 34-year useful life.

 amortization 173 debit -net income

trademark 173 credit -asset

f. Sold used production equipment for $16,000 in cash. The equipment originally cost $45,000, and the accumulated depreciation account has an unadjusted balance of $23,700. It was determined that a $1,800 year-to-date depreciation entry must be recorded before the sale transaction can be recorded.

book value  45,000 - 23,700 - 1,800 = 19,500

sale price = 16,000  loss of 3,500

cash                             16,000  debit +assets

acc depreciation        23,700 debit +asset

depreciation expense  1,800 debit -net income

loss on disposal           3,500 debit -net income

equipment                                   45,000 credit -assets

Explanation:

We follow the accounting principles:

debit = credit

asset + expense = liabilities + equity + expenses

DEBIT //  CREDIT           DEBIT //  CREDIT

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

+++++   //  --------             ------- ///    +++++++

Left side increase fro mdebit and decrease from credit

right side increase through credit decrease with debit.

7 0
3 years ago
Other questions:
  • The following lots of Commodity Z were available for sale during the year. Beginning inventory 7 units at $49 First purchase 18
    10·1 answer
  • if real gdp in 1995 was $4053.7 billion and nominal gdp in 1995 was $4220.3 billion, what was the value of the gdp deflator in 1
    6·1 answer
  • Business products that are purchased routinely, do not become part of finished goods, and are expense items rather than capital
    13·1 answer
  • Blake Company purchased two identical inventory items. The item purchased first cost $18.00, and the item purchased second cost
    7·1 answer
  • Thirty-five percent of the world's commercial energy is produced from _______.
    9·1 answer
  • Veronica Gilbert is an accountant for a surf shop that is expanding their retail store locations. Her supervisor has assigned he
    9·1 answer
  • Please help?!
    6·1 answer
  • Kinh doanh đa cấp là gì
    8·2 answers
  • Consumer wealth is defined as the total value of ______. Multiple choice question. assets minus the total value of liabilities a
    15·1 answer
  • According to recent data, obese patients are less likely than nonobese patients to obtain preventive health services and exams,
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!