A man purchased a house for P425,000. In the first month that he owned the house, he spent P75,000 on repairs and remodeling. Immediately after the house was remodeled, he was offered P545,000 to sell the house. After some consideration, he decided to keep the house and have it rented for P4,500 per month starting two months after the purchase. He collected rent for 15 months and then sold the house for P600,000. If the interest rate was 1.5% per month, how much extra money did he make or lose by not selling the house immediately after it was remodeled?
Q: ed one month ago for $1,000, has just been sold for $1,700. What nominal annual rate of return did…
A: Given, Purchase price = $1,000 Sale price = $1,700 No. of months = 1
Q: On March 1, 2020, Pina Colada Corp. acquired real estate on which it planned to construct a small…
A: THE COST OF LAND INCLUDES THE COST OF LAND , COST OF ALL EXPENSES RELATED TO THE PREPARATIONS OF THE…
Q: Lavallee Furniture purchased land, paying $75.000 cash and signing a $340,000 note payable. In…
A: Formulas: Cost of land = Price of land + Note payable + Property tax + Title insurance + Demolition…
Q: On June 1 of the current year, Jack and Angie purchased a rental beach house for $900,000 and rented…
A: Depreciation can be defined as the deduction that is allowed for the reduction in the real value of…
Q: Gene bought a living room suite for 85,000 pesos. He agreed to pay in 5 months at 12% simple…
A: Simple Interest formula is Future value = Principle * (1 + Rate * Time)
Q: On October 1st, you purchased a residentialhome in which to locate your professional office…
A: a) The first question askes to find the depreciation expense for the first year that the person…
Q: March 1, 2020, Swifty Company acquired real estate on which it planned to construct a small office…
A: Real estate broker fees and architect fees and cost incurred to put in driveways and parking lot…
Q: On May 1, Jack Costanza paid $100,000 for a residential rental property. This purchase price…
A: Property is the part of long term asset. It can be an equipment, appliances, furniture, real-estate…
Q: Bridge City Consulting bought a building and the land on which it is located for $195,000 cash. The…
A: The asset is valued at the total cost incurred to bring the asset for being ready to use.
Q: Molly purchased a franchise agreement to distribute electronic gadgets for 8 years. The agreement…
A: IRR is the rate at which the NPV of a project will become 0. A project can be accepted if the IRR is…
Q: On April 1st, Leo Smith paid $310,000 for aresidential rental property. This purchase price…
A: Definition: Modified accelerated cost recovery system (MACRS): This is a depreciation method…
Q: A property is purchased for $600,000 and sold for $900,000. Which of the following statements is…
A: The capital gain is the difference between the sale value and the adjusted basis.
Q: Dan bought a hotel for $2,600,000 in January 2011. In May 2015, he died andleft the hotel to Ed.…
A: The estate tax is tax payable on the estates i.e. property owned by an individual. When a person…
Q: You have an opportunity to acquire a property from First Capital Bank. The ban obtained the property…
A: Future value is the value of investment on the future date at specified rate of return
Q: You manage a real estate investment company. One year ago, the company purchased 10 parcels of land…
A: calculation of above requirement with all necessary working are as follows
Q: To purchase s11,700 worth of lab equipment for her business, Jenny made a down payment of s1600 and…
A: This is the case of an amortized loan. An amortized loan is that loan in which the periodic payments…
Q: On March 1, 2022, Sandhill Co. acquired real estate, on which it planned to construct a small office…
A: Cost of land includes the cost of demolishing old warehouse, attorney fees of land and real estate…
Q: Fairfield Properties owns real property that is MACRS depreciated with n = 39 years. They paid $3.4…
A:
Q: On January 1, 2020, Norma Smith and Grant Wood formed a computer sales and service company in…
A:
Q: For the current year, santos has wages of $80,000 and the following property transactions: Stock…
A: AGI means adjusted gross income of the individual on which taxes needs to be paid. These taxes are a…
Q: Assume that in January 20X6, a Hotcake House restaurant purchased a building, paying $57,000 cash…
A: Income statement refers to those financial statements of a company which shows the revenues and…
Q: Werner's Fish House purchases a tract of land and an existing building for $870,000. The company…
A: When any land and building is purchased, initial expenditure is incurred to clean the land, tear…
Q: A professional photographer who specializes in wedding-related activities paid $45,500 for equipment…
A: Cost of equipment = $45,500 Salvage at the end of 5 years = $2000 Annual Savings = Let X 1 Day…
Q: Shannon purchased a franchise agreement to distribute electronic gadgets for 7 years. The agreement…
A: Given: Initial investment = $1,800,000 Cash inflow = $975,000 Year 1 and 2 cost = $800,000 Year 7…
Q: On October 1, you purchased a residential home in which lo locale your professional office for…
A: The given information: Price of the building is $150,000. Price of the land is $30,000.
Q: Mr. John wishes to open a new barber shop: he paid for the permits and certifications of $8,000…
A: Salvage value is the value realised on sale or winding up of a business after the business decides…
Q: On March 1, 2022, Wildhorse Company acquired real estate, on which it planned to construct a small…
A: The question is related to the Property, Plant and Equipment. All Costs that are directly…
Q: Bill bought a property for $270,000. The value of the building on the property is $220,000. If the…
A: Depreciation is an accounting method where the entities assets are gone through wear and tear over…
Q: Jack bought a property for $270,000. The value of the building on the property is $220,000. If the…
A: Depreciation = Total Cost of Building - Residual ValueEstimated Useful life
Q: Date Asset Cost 12-Jan Car 24,000 4-Feb Equipment 36,000 15-Mar Qualified…
A:
Q: Candy purchased a 3 bedrooms house in St Kilda on the 1’s March 2015 for the cost of $1.3M. She paid…
A:
Q: The Family Company was expanding, and as a result they engaged in the following activities beginning…
A: Intangible asset: an identifiable non-monetary asset without physical substance. An asset is a…
Q: Joyce purchased the building in which their corporate office is housed on 1/1/21 for $4,700,000.…
A: Here discuss about the details of the options of purchase which was made either for the borrowing or…
Q: Nancy purchased new business computers (7-year property) in January for a total of $1,200,000. She…
A: §179 of Internal Revenue Code states that the business owners have an option to deduct the entire…
Q: On April 1, Year 6, Bob the Builder traded in an equipment with a book value of $2,000 (initial cost…
A: SOLUTION DEPRECIATION MEANS MONETARY VALUE OF AN ASSETS DECREASES OVER TIME DUE TO USE OF WEAR AND…
Q: A man formerly employed as a chief mechanic of an automobile repair shop has saved P1,000,000 which…
A: Given,N = 5 years I = 20%Rental P30,000.00 a monthMiscellaneous P25,000.00 a monthSales tax 3% of…
Q: You own a house that you rent for $1,700 per month. The maintenance expenses on the house average…
A:
Q: Werner's Fish House purchases a tract of land and an existing building for $840,000. The company…
A: The cost of land includes all costs connected with obtaining and putting land to use. Cost of Land…
Q: To purchase $13,600 worth of lab equipment for his business, Omar made a down payment of $1200 and…
A: Often, in order to acquire assets a huge amount of money will have to be paid. When the amount is…
Q: McCoy's Fish House purchases a tract of land and an existing building for $880,000. The company…
A: Cost of Land: The cost of land includes the following costs: Purchase price of land Attorney…
Q: To purchase $ 11,900 worth of restaurant equipment for his business, Greg made a down payment of…
A: Total amount paid by Greg is equal to: = Down Payment made by Greg + (Number of payments * Payments)
Q: On March 1, 2022, Wildhorse Company acquired real estate, on which it planned to construct a small…
A: Introduction:- Calculation of the amount to be reported as the cost of the land as follows:- Basic…
Q: On March 3,Year 5 , Bob the Builder traded in a piece of equipment with a book value of $2,000…
A: Depreciation: A charge on fixed assets that reduces its value known as depreciation. It can be…
Q: Nancy purchased new business computers (5-year property) in January for a total of $1,300,000. She…
A: Depreciation refers to the portion of fixed asset which is allocated on the basis of estimated life…
Q: Grieg Landscaping began construction of a new plant on December 1, 2020. On this date, the company…
A:
Q: During the year, Tulip had the following transactions: Long-term loss on the sale of business use…
A: The IRS defines AGI as "gross income minus adjustments to income." Thus, AGI will depend on the…
Q: A restaurant chain purchases a two-acre tract of land and an existing building for $500,000. The…
A: Capitalization of expenses:-It means recorded of cost or expenses in the balance sheet incurred in…
Q: Stephan Curry, Inc., spent $68,000 in attorney fees while developing the trade name of its new…
A:
Step by step
Solved in 4 steps
- A man purchased a house for P425,000. In the first month that he owned the house, he spent P75,000 on repairs and remodeling. Immediately after the house was remodeled, he was offered P545,000 to sell the house. After some consideration, he decided to keep the house and have it rented for P4,500 per month starting two months after the purchase. He collected rent for 15 months and then sold the house for P600,000. If the interest rate was 1.5% per month, how much extra money did he make or lose by not selling the house immediately after it was remodeled?On April 1st, Leo paid $310,000 for a residential rental property. The purchase price represents $250,000 for the building and $60,000 for the land. Five years later, on November 1st, he sold the property for $400,000. Compute the MACRS depreciation for each of the five calendar years during which he had the property. It is a 27.5 year MACRS property Please need fast answer without plagiarismJim and Ann bought a house with a down payment of $16,000 and a $158,000 loan. The loan was for 25 years at a 4.3% interest rate. Closing costs amounted to an additional 1.1%. Two years later they were transferred and sold the house for what they paid for it, $174,000. The real estate agent charged a 5% fee for selling the house. Find the average monthly cost of the house taking into consideration the monthly payments, the costs of buying and selling, and the equity built up over 2 years. (Round your answer to the nearest cent.) $
- On 01-01-15, G purchased a machine for $10,000,000. Installation costs incurred and paid for on 01-01-15 were $50,000. G started using the machine on 01-01-15. G estimates it will use the machine for 3 years. At the end of the 3rd year, G will have to dispose of the machine at an estimated cost of $435,000. Assume as of 01-01-15 the interest rate on US Treasury securities was 1.75% and G’s credit standing required a 2% risk premium. G uses a straight-line depreciation method and assumes no salvage value. What amount should G report on its balance sheet as a fixed asset (machine) as of 12-31-15? Prepare an excel spreadsheet that clearly identifies and clearly labels G’s ARO obligation balance as of 12-31 for every year from 2015 to 2017 AND G’s accretion expense for every year for 2015 to 2017. Prepare the entries G should make related to the equipment and its ARO for the year ended 12-31-16 AND 12-31-17? On 01-01-18, G paid a vendor $420,000 to dispose of the machine in accordance…A property was purchased for $4,500,000.00 and cars a rental income of S50,000.00 per month. Mr.Johnson. he owner, has to pay annual property tax of 1% of value, grounds maintenance fee of 0.2%, of value and a common area lighting and maintenance fee of $46,000.00 per annum. A slightly largerproperty on the same block is now up for sale and the current tenants are paying a monthly rental ofS55.000.00. Mr. Johnson has ascertained that the expenses ratio for properties in the area is constant.He wants to purchase this new property and has now asked you to use the income capitalisationapproach to real estate valuation to advise him on the following.What is the annual capitalisation rate that this property will attract? (round answer to fivedecimal places)What is the maximum amount that he should pay for this property given that he does not wantto pay more than it is valued? ((round answer to the nearest $1000)How many years will it take for the net income to cover the purchase price of…You own a house that you rent for $1,200 a month. The maintenance expenses on the house average $200 a month. The house cost $89,000 when you purchased it several years ago. A recent appraisal on the house valued it at $120,000. The annual property taxes are $5,000. If you sell the house you will incur $25,000 in expenses. You are deciding whether to sell the house or convert it for your own use as a professional office. What value should you place on this house when analyzing the option of using it as a professional office?
- On May 1, Jack Costanza paid $100,000 for a residential rental property. This purchase price represents $80,000 for the cost of the building and $20,000 for the cost of the land. Nine years and five months later, on October 1, he sold the property for $130,000. Compute the MACRS depreciation for each of the 10 calendar years during which he owned the property.Ken sold a rental property for $608,000. He received $140,000 in the current year and $117,000 each year for the next four years. Of the sales price, $422,500 was allocated to the building, and the remaining $185,500 was allocated to the land. Ken purchased the property several years ago for $479,500. When he initially purchased the property, he allocated $337,500 of the purchase price to the building and $142,000 to the land. Ken has claimed $23,500 of depreciation deductions over the years against the building. Ken had no other sales of §1231 or capital assets in the current year. Required: a. For the year of the sale, determine Ken's recognized gain or loss. b. For the year of the sale, determine character of Ken's gain, and calculate Ken's tax due because of the sale (assuming his marginal ordinary tax rate is 32 percent). Required A Required B For the year of the sale, determine Ken's recognized gain or loss. Note: Round your final answers to the nearest whole dollar amount. Input…Karl Yates needs $7000 to pay for the remodeling work on his house. A contractor agrees to do the work in 2 months. What is the present value of $7,000 at 5.9% simple interest in order to accumulate the $7,000 in 2 months? The present value is (Round to the nearest cent as needed.
- You own a house that you rent for $1,400 per month. The maintenance expenses on the house average $260 per month. The house cost $231,000 when you purchased it 4 years ago. A recent appraisal on the house valued it at $253,000. If you sell the house you will incur $20,240 in real estate fees. The annual property taxes are $3,100. You are deciding whether to sell the house or convert it for your own use as a professional office. What value should you place on this house when analyzing the option of using it as a professional office? Multiple Choice $232,760 $231,000 $228,000 $253,000 $0Fairfield Properties owns real property that is MACRS depreciated with n = 39 years. They paid $3.4 million for the apartment complex and hope to sell it after 10 years of ownership for 50% more than the book value at that time. Compare the expected selling price with the amount that Fairfield paid for the property.Jack bought a property for $270,000. The value of the building on the property is $220,000. If the building has an economic life of 50 years, what is the depreciated value of the building after 5 years?