4 Compute the realized and recognized gain or loss for each of the following transactions and classify as short-term or long-term:a. Marge, a single taxpayer, receives $8,000 for the sale of stock she purchased six years ago for $3,000.b. Lisa, a single taxpayer, receives $3,000 for the sale of stock she purchased six months ago for $8,000.c. Bart and Maggie, married filing jointly taxpayers, receive $3,000 for the sale of stock they purchased three years ago for $10,000.d. Homer, a single taxpayer, receives $12,000 on the sale of his personal-use motorcycle. He purchased the motorcycle four months ago for$16,000.e. Mo, a single taxpayer, receives $16,000 on the sale of his personal-use motorcycle. He purchased the motorcycle four years ago for $12,000.For those boxes in which you must enter subtractive or negative numbers use a minus sign. (Example: -300)Pb.C₂d.e.$ 5,0006969Gain/(loss)Realized69-5,000-7,000-4,0004,000Gain/(loss)Recognized$ 5,0004,000XXLong-term/Short-termLong-termShort-termLong-termShort-termLong-termP

Gain/(loss) realized refers to the profit earned from selling at a higher price than the cost while…

Answered: Compute the realized and recognized…

Compute the realized and recognized gain or loss for each of the following transactions and classify as short-term or long-term:

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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Concept explainers

Contingent Liabilities and Provisions

A contingent liability can be defined as a liability the occurrence of which is dependent upon the happening of an uncertain future event. It is generally recorded in the books only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly.

Question

Compute the realized and recognized gain or loss for each of the following transactions and classify as short-term or long-term:
a. Marge, a single taxpayer, receives $8,000 for the sale of stock she purchased six years ago for $3,000.
b. Lisa, a single taxpayer, receives $3,000 for the sale of stock she purchased six months ago for $8,000.
c. Bart and Maggie, married filing jointly taxpayers, receive $3,000 for the sale of stock they purchased three years ago for $10,000.
d. Homer, a single taxpayer, receives $12,000 on the sale of his personal-use motorcycle. He purchased the motorcycle four months ago for
$16,000.
e. Mo, a single taxpayer, receives $16,000 on the sale of his personal-use motorcycle. He purchased the motorcycle four years ago for $12,000.
For those boxes in which you must enter subtractive or negative numbers use a minus sign. (Example: -300)
P
b.
C₂
d.
e.
$ 5,000
6969
Gain/(loss)
Realized
69
-5,000
-7,000
-4,000
4,000
Gain/(loss)
Recognized
$ 5,000
4,000
X
X
Long-term/
Short-term
Long-term
Short-term
Long-term
Short-term
Long-term
P

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Accounting for Current liabilities, Provisions and Contingencies

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