I want to correct answer general accounting MH, Inc. sold a business asset with a $39,400 adjusted tax basis for$130,000 in 2008. The purchaser paid $50,000 cash and gave MH anote for the $80,000 balance of the price. MH is using theinstallment sale method to recognize its gain on sale. In 2011, MHsold the balance of the note to a financial institution for the note's$55,000 face value (MH had already received a total of $25,000 ofprincipal payments on the note). Compute MH's recognized gain onsale of the installment note in 2011.A. $0.B. $38,332.C. $52,268.D. $55,000.E. None of the above

Step 1: Understand the ScenarioMH, Inc. sold a business asset in 2008 for $130,000:Adjusted tax…

Answered: MH, Inc. sold a business asset with a…

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter19: Corporations: Distributions Not In Complete Liquidation

Section: Chapter Questions

Problem 34P

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On January 1, 2017, Lombard Co. sells property forwhich it had paid $690,000 to Sargent Company, receivingin return Sargent’s zero-interest-bearing note for$1,000,000 payable in 5 years. What entry would Lombardmake to record the sale, assuming that Lombardfrequently sells similar items of property for a cash salesprice of $640,000?
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On January 1, 2025, Oriole Co. sells land for which it had paid $707,400 to Sargent Company, receiving in return Sargent's zero- interest-bearing note for $1,000,000 payable in 5 years. What entry would Oriole make to record the sale, assuming that Oriole frequently sells similar items of land for a cash sales price of $651,000? (If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Date Account Titles and Explanation Jan. 1 Notes Receivable Discount on Notes Receivable Debit Credit
On January 1, 2021, Ree Company sold a machine to Say Company. In lieu of cash payment, Say gave Ree a 5-year, P500,000 note. The machinery has a cost of P500,000 and accumulated depreciation as of January 1, 2021 of P150,000. The note is a non-interest bearing note and the prevailing rate of interest for a note of this type is 10%. Required: Answer the following questions: (Round off PV factors to 4 decimal places before multiplying.) 1. Current portion of the notes receivable 2. Non current portion of the notes receivable
On January 1, 2021, Ree Company sold a machine to Say Company. In lieu of cash payment, Say gave Ree a 5-year, P500,000 note. The machinery has a cost of P500,000 and accumulated depreciation as of January 1, 2021 of P150,000. The note is a non-interest bearing note and the prevailing rate of interest for a note of this type is 10%. Required: Answer the following questions: (Round off PV factors to 4 decimal places before multiplying.) 1. Gain or loss on sale of machinery (place parenthesis if loss) 2. Interest income
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On January 1, 2021, Gobert Company sold property to Beasley Company. There was no established exchange price for the property, and Beasley gave Gobert a $751,000 zero-interest- bearing note payable on January 1, 2025. The prevailing rate of interest for a note of this type is 6%. The property had a book value of $341,000 to Gobert. What should be the balance of the Discount on Notes Payable account on the books of Beasley at December 31, 2021 after adjusting entries are made, assuming that the effective-interest method is used?
On January 2, 2009, Blake Co. sold a used machine to Cooper Inc. for P900,000 resulting to a gain of P270,000. On that date, Cooper paid P150,000 cash and signed a P750,000 note bearing interest at 10%. The note was payable in three annual installments of P250,000 beginning January 2, 2010. Blake appropriately accounted for the sale under the installment method. Cooper made a timely payment of the first installment on January 2, 2010, of P325,000, which included accrued interest of P75,000. What amount of deferred gross profit should Blake report at December 31, 2010?
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