Gain Or Loss & Gross Profit And Taxable Income

Posted Under: Tax Accounting

Ask A Question

Hire Experts For Answers

Order Now

Related Study Services

DESCRIPTION
Posted
Modified
Viewed 12
Lesson 9 Case Study 1.Create an Excel spreadsheet with two tabs labeled Part 1 and Part 2. 2.Copy the questions and place your answers under each question in the spreadsheet. 3.You must show your calculations and explain your answers using either the textbook or sources to support your reasoning. Be sure to answer all questions. 4.You must include in-text citations and references to cite each source you used. Part 1: Gain or Loss Case Study 1 During the current year, ABC Corporation sells a tract of land for $75,000. The sale is made to Bendi, ABC Corporation’s sole shareholder. ABC Corporation originally purchased the land 5 years earlier for $98,000. 1.What is the amount of gain or loss that ABC Corporation will recognize on the sale during the current year? 2.Assume that in the following year, Bendi sells the land for $85,000. What is the amount of gain or loss Bendi will recognize? What are the tax consequences to ABC Corporation upon the subsequent sale by Bendi? 3.Assume that in the following year, Bendi sells the land for $70,000. What is the amount of gain or loss Bendi will recognize? 4.Assume that in the following year, Bendi sells the land for $105,000. What is the amount of gain or loss Bendi will recognize? Part 2: Gross Profit and Taxable Income Answer each of the questions below. You must show your calculations and explain your answers. Case Study 2 In Year 1 ABC Company sells equipment to XYZ Company for $400,000 in an installment sale. ABC Company has a basis in the equipment of $250,000. In Year 1 ABC company will receive three payments totaling $300,000 and in year 2 the final payment totaling $100,000. 1.What is the gross profit on the sale? 2.What is the gross profit percentage? 3.How much taxable income is recognized in Year 1? 4.How much taxable income is recognized in Year 2? 5.If the equipment was sold for a price of $100,000 rather than $400,000, how much loss would be recognized in Year 2?

This order does not have tags, yet.

Attachments
Lesson 9 Case Study 1. Create an Excel spreadsheet with two tabs labeled Part 1 and Part 2. 2. Copy the questions and place your answers under each question in the spreadsheet. 3. You must show your calculations and explain your answers using either the textbook or sources to support your reasoning. Be sure to answer all questions. 4. A full essay in APA format is not required, but you must include in-text citations and references to cite each source you used.   Part 1: Gain or Loss Case Study 1 During the current year, ABC Corporation sells a tract of land for $75,000. The sale is made to Bendi, ABC Corporation’s sole shareholder. ABC Corporation originally purchased the land 5 years earlier for $98,000. 1. What is the amount of gain or loss that ABC Corporation will recognize on the sale during the current year? 2. Assume that in the following year, Bendi sells the land for $85,000. What is the amount of gain or loss Bendi will recognize? What are the tax consequences to ABC Corporation upon the subsequent sale by Bendi? 3. Assume that in the following year, Bendi sells the land for $70,000. What is the amount of gain or loss Bendi will recognize? 4. Assume that in the following year, Bendi sells the land for $105,000. What is the amount of gain or loss Bendi will recognize? Part 2: Gross Profit and Taxable Income Answer each of the questions below. You must show your calculations and explain your answers. Case Study 2 In Year 1 ABC Company sells equipment to XYZ Company for $400,000 in an installment sale. ABC Company has a basis in the equipment of $250,000. In Year 1 ABC company will receive three payments totaling $300,000 and in year 2 the final payment totaling $100,000. 1. What is the gross profit on the sale? 2. What is the gross profit percentage? 3. How much taxable income is recognized in Year 1? 4. How much taxable income is recognized in Year 2? 5. If the equipment was sold for a price of $100,000 rather than $400,000, how much loss would be recognized in Year 2?
Explanations and Answers 0

No answers posted

Post your Answer - free or at a fee

Login to your tutor account to post an answer

Posting a free answer earns you +20 points.

Login

NB: Post a homework question for free and get answers - free or paid homework help.

Get answers to: Gain Or Loss & Gross Profit And Taxable Income or similar questions only at Tutlance.

Related Questions