User Account

All Pages

Determine the gross profit on the sale

Assignment Help Accounting Basics
Reference no: EM133144772

Question - George, a cash basis taxpayer, sells equipment for $200,000. The equipment originally cost $70,000 and George deducted $10,000 of tax depreciation as of the date of sale (assume no other depreciation is allowed or allowable). The equipment is subject to a $50,000 loan which the purchaser assumes. George incurred $13,000 of selling expenses related to the sale. The purchaser pays $10,000 at the time of sale and agrees to pay $20,000 per year for the next 7 years. Assume the note provides for adequate stated interest.

A. Determine the gross profit on the sale?

B. Determine the contract price?

C. Determine the gross profit percentage?

D. Determine the income and the character of such to be reported in the year of sale?

E. Determine the income and the character of such to be reported in each subsequent year?

F. Assuming George recognizes the gain on the sale under the cost recovery method for book purposes, determine the amount of the Schedule M-1 item for the year of the sale?

Reference no: EM133144772

Questions Cloud

How can an accounting change : How can an accounting change cause a company to increase a previously reported inventory amount? Are all accounting changes reported this way
Opportunities for lateral leadership : What opportunities for lateral leadership exist to an aspiring entrepreneur role?
Ministries does a church normally lack : What items, resources, or ministries does a Church normally lack?
Discuss culture as a factor in business : Discuss culture as a factor in business; how are companies adapting their ethical systems to a global framework?
Determine the gross profit on the sale : The purchaser pays $10,000 at the time of sale and agrees to pay $20,000 per year for the next 7 years. Determine the gross profit on the sale
Explain how you are planning to integrate : Explain how you are planning to integrate all the work from this term into the executive summary (course project).
Discuss the role of distribution management : 1. Discuss the role of distribution management in the marketing mix.
Analyzing a historical trend : A U.S. History topic pre-Reconstruction - synthesize information to answer a historical question and create a paper on the question
Ikea case study : From a global strategy standpoint, how would you characterise IKEA's strategy prior its missteps in North America? How would you characterise its strategy today

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd