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Kong originally sold his home for $96,000. At that time, his adjusted basis in the home was $99,000. Five years later, he repossessed the home when the balance of the note was $91,000. He resold it within one year for $105,000. Original sale expenses were $1,250, and resale expenses were $1,550. Repossession costs were $3,000. He incurred $1,000 for improvements prior to the resale. What is Kong's recomputed gain? a. $4,200 b. $6,800 c. $11,000 d. $14,000

Kong originally sold his home for $96,000. At that time, his adjusted basis in the home was $99,000. Five years later, he repossessed the home when the balance of the note was $91,000. He resold it within one year for $105,000. Original sale expenses were $1,250, and resale expenses were $1,550. Repossession costs were $3,000. He incurred $1,000 for improvements prior to the resale. What is Kong's recomputed gain? a. $4,200 b. $6,800 c. $11,000 d. $14,000

FINANCIAL ACCOUNTING
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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Kong originally sold his home for $96,000. At that time, his adjusted basis in the home was $99,000. Five years later, he repossessed the home when the balance of the note was $91,000. He resold it within one year for $105,000. Original sale expenses were $1,250, and resale expenses were $1,550. Repossession costs were $3,000. He incurred $1,000 for improvements prior to the resale. What is Kong's recomputed gain? a. $4,200 b. $6,800 c. $11,000 d. $14,000
Transcribed Image Text:Kong originally sold his home for $96,000. At that time, his adjusted basis in the home was $99,000. Five years later, he repossessed the home when the balance of the note was $91,000. He resold it within one year for $105,000. Original sale expenses were $1,250, and resale expenses were $1,550. Repossession costs were $3,000. He incurred $1,000 for improvements prior to the resale. What is Kong's recomputed gain? a. $4,200 b. $6,800 c. $11,000 d. $14,000
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