Rock Crab, Inc., purchases the following assets during the year: $ 3,000 1,000 4,000 25,000 Computer Computer desk Office furniture Delivery van What should be reported as the cost basis for MACRS 5-year property? O $3,000 O $25,000 O $28,000 O $33,000

Rock Crab, Inc., purchases the following assets during the year: $ 3,000 1,000 4,000 25,000 Computer Computer desk Office furniture Delivery van What should be reported as the cost basis for MACRS 5-year property? O $3,000 O $25,000 O $28,000 O $33,000

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Catherine Steele owns two rental properties originally valued at $275,000 (Property 1t land $70,000, building $55,000) (Property 2 land $90,000, building $60,000) The buildings are Class 1 (4%) properties. Net rental income before CCA in 2020 was $11,000 • The UCC on building 1 at the beginning of 2020 was $50,00o. • The UCC on building 2 at the beginning of 2020 was $40,000 • Property 2 was soid in 2020 for $250,000 (land $200,000, bulding $50,000) Required Calculate Catherine's net rental income for 2020 then subtract the allowable CCA to arrive at her Net Income from rental property Numeric Response
Rodriguez Company pays $358,020 for real estate with land, land improvements, and a building. Land is appraised at $164,000; land improvements are appraised at $82,000; and the building is appraised at $164,000. 1. Allocate the total cost among the three assets. 2. Prepare the journal entry to record the purchase. Complete this question by entering your answers Required 1 Required 2 Allocate the total cost among the three assets. (Round answers to 2 decimal places.) Appraised Value Percent of Total Appraised Value x Total Cost of = Apportioned Acquisition Cost Land Land improvements Building Totals Required 2
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Riverboat Adventures pays $310,000 plus $15,000 in closing costs to purchase real estate. The real estate consists of land appraised at $35,000, a building appraised at $105,000, and land improvements appraised at $210,000. Compute the cost that should be allocated to the building. Multiple Choice $97,500. $105,000. $89,178. $140,000. $93,000.
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Using the following information, determine the net operating income (NOI) for the first year of operations of the subject property using "above-line" treatment of capital expenditures. Subject Property Number of apartments Market rent (per month) Vacancy and collection losses Operating expenses Capital expenditures O $135,000 $162,000 $137.700 $153,900 15 1000 10% of PGI 5% of EGI 10% of EGI
9. Amazing Inc. purchased Class 8 furniture for $4,000 in 2022. In 2023, this furniture was sold for $1,000. Class 8 UCC was $10,300 at the beginning of 2022 and no Class 8 property was purchased during the year. What is the UCC of this class at the end of 2023? A. $1,860 B. $7,440 C. $9,300 D. $8,240 10. Mary carries on business as a sole proprietor that generated $100,000 in net accounting income. Included in this amount are: • $7,000 of amortization expense; •$4,000 for bad debt expense; • $112,000 cost of goods sold; and • $12,000 meals and entertainment with clients. Mary's maximum CCA has been calculated at $10,000 for the year. What is Mary's business income for income tax purposes? A. $113,000 B. $109,000 A) C. $107,000 $103,000 11. Tomas began carrying on a home-based business as a sole proprietor on January 1, 2023. In 2023, he received $40,000 cash for services rendered and paid $33,000 in business expenses. On December 31, 2023 there was an outstanding accounts receivable…
A company is purchasing equipment for $150,000 (7yr MACRS property). The estimated useful life of the equipment to the company is 5 years. At the end of 5 years it will be sold for $20,000. Calculate the MACRS depreciation, book value, and the gain or loss on the sale of the equipment.

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