if you buy a business for $120,000, includes $20,000 for legal fees and $100,000 to the seller. fmv on building was $80,000 , land fmv $10,000, and furniture fmv of $10,000. what is the basis in the building, land and fixtures?

if you buy a business for $120,000, includes $20,000 for legal fees and $100,000 to the seller. fmv on building was $80,000 , land fmv $10,000, and furniture fmv of $10,000. what is the basis in the building, land and fixtures?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: a. What is Carl's allowable depreciation deduction for his real property for years 1 and 2? Note:…

A: Depreciation is a tax deduction that allows taxpayers to recover the cost of certain assets over…

Q: Given the following information, what adjustment would need to be made to account for the lot size…

A: The business's main objective is earning profit. The profit cannot survive without profit. The…

Q: Trented a house this year with the following results: Rent Income $4,000 Utilities $2,500…

A: Any loss incurred by the citizens of the US from the rental property which they have own is allowed…

Q: A company purchases a new building for $500,000. They pay $100,000 in cash and finance the remainder…

A: The objective of this question is to understand how to record the acquisition of a building and land…

Q: The property taxes on a business office were $1170. What was the tax rate if the business office was…

A: Income tax: It is the amount a person is liable to pay on the earned amount in an accounting…

Q: Consider the following: 1,000 dwellings valued at $100,000 each. Each owner faces risk of a $100,…

A: To calculate the premium to be paid by each owner, we need to consider the total amount of losses…

Q: Using a capitalization rate of 10% a commercial property is valued at $420,000. The expenses are 30%…

Q: The Maxim Company acquired a building for $500,000. Maxim had the building appraised, and found that…

A: Lets understand each principal given in the question for answering the question. Going concern…

Q: A person bought a property for $270,000. The value of the building on the property is $220,000.…

A: Depreciation is an accounting method for assets where they have gone through various wear and tear…

Q: A property was purchased for $4,500,000.00 and cars a rental income of S50,000.00 per month. Mr.…

A: ANSWER:

Q: I have the answer and question below but I need to know HOW to get the answer. Thank you Find the…

A: The assessed value property is the value which is derived after assessment of the property through…

Q: The company is setting aside funds to acquire a property for its new warehouse. The company needs…

Q: If your father wants to invest in a piece of land and give you the following facts •Purchase price…

A: Internal rate of return (IRR) is the minimum expected rate of return from investment to access…

Q: An investor is considering the acquisition of a "distressed property" which is on Northlake Bank's…

A: a) Sale price required in Year 1 to earn 20% IRR:Initial equity investment: Purchase price:…

Q: Return on Investment (ROI) Formula: ROI = [(Investment Gain – Cost of Investment) / Cost of…

A: We need to calculate return on investment (ROI). ROI is a percentage showing the gain made on an…

Q: Lotus purchases a new machine for $20,000, and spends $2,000 on sales taxes, $500 for delivery, and…

A: The capitalization cost includes cost price and other expenses that are incurred for making the…

Q: Selling Land for $50,000 more then what the business originally purchased the Land for would result…

A: Selling land for a price greater than its acquisition cost would result in a net profit. Statement…

Q: Question 1 You are an analyst employed to evaluate a financial lease relating to a piece of…

A: The principles and procedures used by firms to record and disclose leases in their financial…

Q: Q1:- A contractor who has a construction mechanism that he presents to rent for his data as in the…

A: Rental price of contractor can be calculated using following formula R = P (1+r)^n - B where R =…

Q: Use below information for Questions 7 to 10: Jane Botosan operates a bed and breakfast hotel in a…

A: The objective of this question is to calculate the Break Even Point (BEP) in sales for Jane's bed…

Q: Scenario: You purchase... 10 acres of bare ground in an area zoned commercial/office. Streets and…

A: Here, Size of land is 10 acres Price paid per square feet is $6 Holding Period is 5 years

Q: Your company is deciding between leasing or selling an older piece of equipment. Information related…

A: Lease is a financial arrangement in which the owner of the asset is ready to give the right of use…

Q: What is the market value (V) of a property that has an NOI of $56,000 and a land value (V) of…

A: The net operating income (NOI) is 56,000.The value of the land (VL) is $150,000.The RL is 7%.The RB…

Q: 1.Art del Rosario bought a Condo unit for P2,300,000 (P2.3M). He paid a downpa equivalent to 4 of…

A: While purchasing property there is need to pay the down payment and remaining payment is made later…

Q: If your father wants to invest in a house and give you the following facts. Purchase price SR…

A: Investors have different options to make investments, and the motive behind investments is to…

Q: A)Dan's real estate buys a 50,000 sq foot warehouse for $1,000,000. They financed the purchase with…

A: Company is earning regular profits from the operating activities conducted. The profit that remains…

Q: 4. A piece of equipment costs $50,000 to buy. Insurance costs S1000 a year. The maintenance costs…

A: Financial Management: Financial management comprises of two words i.e. Finance and management.…

Q: Barbara Thompson is considering the purchase of a piece of business rental property containing…

A: Given information: Initial investment on a property is $350,000. An annual receipt as rent is…

Q: XYZ company bought a car with a list price of $30,000. They had to pay $1,500 sales tax in addition…

A: Sales tax is defined as the amount charged on the trading of goods. It is paid to the government or…

Q: 7. You and your partner purchased an apartment complex that cost $1,000,000 in June of 2010. You…

A: It is being said to calculate the depreciation deduction of 1st year for an apartment complex . The…

Q: A civil engineer bought a crane for erecting tall buildings. It was invoiced from Japan (Cost,…

A: Introduction:- First we need to calculate straight-line method of depreciation rate Cost of the…

Q: If the property before tax cashflow (PBTCF) in a given year is $125,000, total debt service is…

A: The Equity after tax cash flow of the investor is that income after deducting all expenses and tax.

Q: Question 1: Disposition and Renovation Decisions I. An investor has owned a property for five years.…

A: HONOR CODE: Since you have posted a question with multiple sub-parts, we will provide the solution…

Q: XYZ company bought a car with a list price of $30,000. They had to pay $1,500 sales tax in addition…

A: Cost of assets represents the costs involved in acquiring, installing and commissioning assets.

Q: 3. A company functioning from a rented building, decides to buy a new building for its head office.…

A: The breakeven point is determined by dividing the set production costs by the unit price less the…

Q: Your clients, who file MFJ, have a MAGI of $318,000. They recently sold their principal residence…

A: It is the income tax imposed under Section 1411 of the Internal revenue code. As per the provisions…

Q: uestion 2: If a business owns a eal estate worth $250,000, and they owe 180,000 on a loan for that…

A: Owner’s equity is the amount of owner’s capital in the total amount of investment. It is the amount…

Q: b. SYD Method YEAR BOOK VALUE AT THE DEPRECIATION CHARGE BOOK VALUE AT THE BEGINNING OF THE YEAR…

A: Depreciation is an expense but a non-cash expense which is shown in the income statement. It is a…

Q: Carl purchased an apartment complex for $1.4 million on March 17 of year 1. of the purchase price,…

A: Accounting method wherein the cost of a tangible asset is spread over the asset's useful life.…

Q: It is not easy to obtain the building or parcel prices of income-generating real estates of similar…

A: The revenue of $16,000 lies between $15,000 and $18,000, The sale price is $115,400 when $15,000 is…

Q: A car is purchased at $18,000. The car depreciates by $800 each year. When would the car be worth…

A: Lets understand the basics. Depreciation is a reduction in value of asset due to wear and tear,…

Q: What would you expect to pay for a 5486 sqm prime industrial property, fully leased at $175/sqm…

A: Gross Income = Building area * gross rate. Outgoings = Building area* outgoings rate. Net Income =…

Q: Q2(d). According to your research, the Market Capitalization Rate for this type of property should…

A: The value of the property is the capitalized value of future cash flows. It is computed by dividing…

Q: Carl purchased an apartment complex for $2.8 million on March 17 of year 1. of the purchase price,…

A: A firm can lower its taxable income, which, in turn, lowers the amount of income subject to…

Question

if you buy a business for $120,000, includes $20,000 for legal fees and $100,000 to the seller.

fmv on building was $80,000 , land fmv $10,000, and furniture fmv of $10,000.

what is the basis in the building, land and fixtures?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Acquisition Cost:

VIEW

Step 2: Computation of the basis:

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

You want to value a property with an effective gross income of $53,000 and a Net Operating Income of $27,500. The table below summarizes the valuation and income of comparable properties. Comp 1 Comp 2 Comp 3 Price $300,000 $350,000 $375,000 Gross Income $50,000 $55,000 $60,000 % Operating 50% 55% $54% Expense Net Operating Income $25,000 $30,000 $32,500 What value would a Gross Income Multiple approach yield (rounded to the nearest $100)? $329,200 $325,000 $330,000 $316,900
E2
While comparing physical stock with the balance shown in the stock cards, surplus and deficiencies are often found." Why do these discrepancies also state the methods you would consider employing to reduce them? (at least reasons)(
The following costs pertain to a new delivery truck that was purchased on March 31, 2020. All costs were paid in cash. Calculate how much the truck will be capitalized as an asset for the truck. How much will be expensed? You are not required to prepare a journal entry. Cost of Truck $30,000 Delivery charges $1,300 Ongoing gasoline purchases each week $ 200 Sales Tax $2,100
Assume that you’ve just inherited $100,000 and wish to use all or part of it to make a real estate investment. Would you invest directly in real estate, or indirectly through something like a REIT? Explain. Assuming that you decided to invest directly, would you invest in income-producing property or speculative property? Why? Describe the key characteristics of the types of income producing or speculative property you would seek. What financial and nonfinancial goals would you establish before beginning the search for suitable property? If you decide to invest in real estate indirectly, which type(s) of securities would you buy, and why?
A man planned of building a house. The cost of construction is P 500,000, while annual maintenance cost is estimated at P 10,000. If the interest rate is 6%, what is the capitalized cost of the house?
3
You're doing a CMA on a two-bed, two-bath property with a pool. In your area, bedrooms are worth $15,000, bathrooms $7,000, and pools $10,000. Comp A is a three-bedroom, two-bath property without a pool that sold recently for $350,000. What adiusted value should you use for Comp A? $345,000 $355,000 $340,000 $325,000
Subject :- Accounting
suppose you buy land for $2,800,000 and spend $1,100,000 to develop the property.You then divide the land into lots as follows:Category Sale Price per Lot15 Hilltop lots................15 Valley lots.................$510,000$240,000How much did each Hilltop lot cost you?a. $176,800b. $83,200c. $510,000d. $36,667
Please answer thank you!
If I have a machine that I purchased for $50,000. I'be recorded depreciation of $28,000. I sell the machine for $25,000. how would I record the sale? How would MY entry change if I sold the machine for $15,000 rather than $25,000?