Ms. Drake sold a business that she had operated as a sole proprietorship for 18 years. On the date of sale, the business balance sheetshowed the following assets:Accounts receivableInventoryFurniture and equipment:CostAccumulated depreciationLeasehold improvements:CostAccumulated amortizationTax Basis$ 32,700154,200Net cash flow53,000(42,400)26,500(5,300)Required:The purchaser paid a lump-sum price of $322,000 cash for the business. The sales contract stipulates that the FMV of the businessInventory is $166,000, and the FMV of the remaining balance sheet assets equals adjusted tax basis. Assuming that Ms. Drake'smarginal tax rate on ordinary income is 35 percent and her rate on capital gain is 15 percent, compute the net cash flow from the saleof her business.

The process of collecting taxes from individuals and corporations is known as taxation, whereas Fair…

Answered: Accounts receivable Inventory Furniture…

Accounts receivable Inventory Furniture and equipment: Cost Accumulated depreciation Leasehold improvements: Cost Accumulated amortization Tax Basis $ 32,700 154,200 53,000 (42,400) 26,500 (5,300)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Sir please help me sir urgently please
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Accounting Question
Account Title Balance ($) Accounts Payable 11,700Accounts Receivable 69,000Accumulated Depreciation - Building 44,200Building 439,500Cash 28,000Depreciation Expense - Building 8,750Insurance Expense 2,500Miscellaneous Expense 6,200Prepaid Insurance 2,500Repairs Expense 3,000Rent Expense 48,000Rent Revenue 12,000Salaries Expense 522,100Salaries…