Answer:
A. To qualify for exclusion during this transaction, you must have owned and occupied for two of the five prior years ⇒<u> Sale of a home.</u>
B. This term essentially includes all income subject to federal tax ⇒ <u>Gross Income</u>.
C. Using taxable income, it is based on tax tables or tax rate schedules ⇒ <u>Tax liability.</u>
D. This term includes expenses that can only offset portfolio income. ⇒ <u>Investment expenses. </u>
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E. This is used to offset passive income Investment expenses. ⇒ <u>Real estate or limited partnership expenses. </u>
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F. This term includes income from self-employment ⇒<u> Active Income. </u>
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G. This item is taxed at different rates depending on the holding period ⇒ <u>Capital gains. </u>
H. This is used to determine tax liability ⇒<u> Taxable income</u>.
I. This term includes income gained from real estate and limited partnerships. ⇒ <u>Passive income. </u>
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J. This term refers to earnings and capital gains generated from investment holdings. ⇒ <u>Portfolio income. </u>
I believe the answer is: D. excise tax
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Purchase tax refers to the tax that must be paid by the buyer whenever they purchase a certain product. One of the example would be an excise tax.
Excise tax is the tax that buyers must paid when we buy a product that create some sort of negative effect to the society or environment. Example of an excise tax would be gasoline tax.
Answer:
$10,371.04
Explanation:
The 540,000 is a future cashflow and you can use a financial calculator with the following inputs to find the recurring payment(PMT);
Future value; FV= $540,000
Duration of investment ; N = 12*4 = 48 quarters
Quarterly interest rate ; I/Y = 4.1%/12 = 0.342%
One time present cashflow ; PV = 0
Compute recurring payment ; CPT PMT = 10,371.036
Therefore, $10,371.04 at the end of each quarter.
Answer: True
Explanation:
The Weighted Average Cost of Capital (WACC) calculates the cost of capital to a company for the means of capital it uses to finance operations. It is based on the cost and the weight of the various capital types.
Formula is;
<em>= Cost of Equity * %Equity + Cost of debt * %Debt * ( 1 - Tax rate) + Cost of Preferred Stock * %Preferred stock</em>
The required rate of return on preferred stock is the same as the Cost of Preferred Stock. From the formula it is shown that if this rate increases, holding all else equal, total WACC will increase.
Answer:
The journal entry to record the write down is:
Dr Cost of goods sold 1,000
Cr Inventory 1,000
Since cost of goods sold increases, then net income (income statement) will decrease. A decrease in net income will also result in lower retained earnings (balance sheet).