What is the gross profit percentage from the sale

Assignment Help Accounting Basics
Reference no: EM131749282

Problem - Gross profit percentage: Mike sold a 40-acre tract of land for $500,000 on January 1. The land had an adjusted basis of $300,000. The agreement specified a down payment of $100,000, with the remaining $400,000 sales price to be paid over a five-year-note term at 10% interest.

(a) What is the gross profit percentage from the sale?

(b) What is the capital gain on the down payment?

(c) What is the return of capital on the down payment?

(d) If Mike received a note payment of $120,000 in the first year, of which $40,000 represented accrued interest, how much of the $120,000 is ordinary income, capital gain and nontaxable return of capital.

Reference no: EM131749282

Questions Cloud

Which requirements are a bit dubious in setting : What do the data appear to show? Check the conditions for one-way ANOVA. Which requirements are a bit dubious in this setting?
What is the gross margin : Beginning finished goods, 1/1/2015 - $ 92,000 and Ending finished goods, 12/31/2015 - 75,000. What is the gross margin for 2015
Describe your theme : Compare the three examples with a reasoned argument about the similarities and differences, as well as the meaning of those similarities and differences.
Difference between aluminum and clay significant for legumes : Cooking meat and legumes in aluminum and clay pots. There appears to be little difference between the iron content of food cooked in aluminum pots.
What is the gross profit percentage from the sale : Gross profit percentage: Mike sold a 40-acre tract of land for $500,000 on January 1. What is the gross profit percentage from the sale
Determine types of food differ in iron content : Iron in food cooked in iron pots. The data show that food cooked in iron pots has the highest iron content. They also suggest that the three types of food.
How can you protect your it product or service idea : Based on your research and readings, post answers to the following questions: How can you protect your IT product or service idea?
What observations does the memoir make about human nature : How do these quotations help you understand the message or theme of this memoir? What observations does the memoir make about human nature?
What is the purpose of an adjusted trial balance : Using the Annual Report of your selected company answer the following questions in the Discussion: What is the purpose of an adjusted trial balance

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.

  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!

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