Problem 4-10Rental Income and Expenses (LO 4.7)Sherry rents her vacation home for 6 months and lives in it for 6 months during the year. Her gross rental incomeduring the year is $6,000. Total real estate taxes for the home are $2,200, and interest on the home mortgage is$4,000. Annual utilities and maintenance expenses total $2,000, and depreciation expense is $4,500.Calculate Sherry's deductible depreciation, the net income or loss from the vacation home, and the loss carryforward,if any.Base allocation on number months, rather than days. If your answer value is zero, enter "0".Rental income6,000Expenses:Real estate taxes1,100Mortgage interest2,000Utilities and maintenance1,000Depreciation2,250 x875 XNet rental incomeLoss carried forward to 2022350

Answered: Rental Income and

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Problem 4-10
Rental Income and Expenses (LO 4.7)
Sherry rents her vacation home for 6 months and lives in it for 6 months during the year. Her gross rental income
during the year is $6,000. Total real estate taxes for the home are $2,200, and interest on the home mortgage is
$4,000. Annual utilities and maintenance expenses total $2,000, and depreciation expense is $4,500.
Calculate Sherry's deductible depreciation, the net income or loss from the vacation home, and the loss carryforward,
if any.
Base allocation on number months, rather than days. If your answer value is zero, enter "0".
Rental income
6,000
Expenses:
Real estate taxes
1,100
Mortgage interest
2,000
Utilities and maintenance
1,000
Depreciation
2,250 x
875 X
Net rental income
Loss carried forward to 2022
350

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Income statement: The income statement determines the net income of the business by subtracting the total expenses from the total revenue. There is a net loss in case the total expenses are more than the total revenue.

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