Wesley, who is single, listed his personal residence with a real estate agent on March 3, 2022, at a price of $390,000. He rejectedseveral offers in the $350,000 range during the summer. Finally, on August 16, 2022, he and the purchaser signed a contract to sell for$363,000. The sale (i.e., closing) took place on September 7, 2022. The closing statement showed the following disbursements:Real estate agent's commissionAppraisal feeExterminator's certificateRecording feesMortgage to First BankCash to seller$21,780600300800305,00034,520Wesley's adjusted basis for the house is $200,000. He owned and occupied the house for seven years. On October 1, 2022, Wesleypurchases another residence for $325,000.If an amount is zero, enter "0".a. Calculate Wesley's recognized gain on the sale.b. What is Wesley's adjusted basis for the new residence?

Adjusted basis is defined as the net cost of the assets after adjusting various items related to…

Wesley, who is single, listed his personal residence with a real estate agent on March 3, 2022, at a price of $390,000. He rejected several offers in the $350,000 range during the summer. Finally, on August 16, 2022, he and the purchaser signed a contract to sell for $363,000. The sale (i.e., closing) took place on September 7, 2022. The closing statement showed the following disbursements: Real estate agent's commission $21,780 Appraisal fee Exterminator's certificate Recording fees Mortgage to First Bank Cash to seller 600 300 800 305,000 34,520 Wesley's adjusted basis for the house is $200,000. He owned and occupied the house for seven years. On October 1, 2022, Wesley purchases another residence for $325,000. If an amount is zero, enter "0". a. Calculate Wesley's recognized gain on the sale. b. What is Wesley's adjusted basis for the new residence?

Wesley, who is single, listed his personal residence with a real estate agent on March 3, 2022, at a price of $390,000. He rejected several offers in the $350,000 range during the summer. Finally, on August 16, 2022, he and the purchaser signed a contract to sell for $363,000. The sale (i.e., closing) took place on September 7, 2022. The closing statement showed the following disbursements: Real estate agent's commission $21,780 Appraisal fee Exterminator's certificate Recording fees Mortgage to First Bank Cash to seller 600 300 800 305,000 34,520 Wesley's adjusted basis for the house is $200,000. He owned and occupied the house for seven years. On October 1, 2022, Wesley purchases another residence for $325,000. If an amount is zero, enter "0". a. Calculate Wesley's recognized gain on the sale. b. What is Wesley's adjusted basis for the new residence?

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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Wesley, who is single, listed his personal residence with a real estate agent on March 3, 2021, at a price of $390,000. He rejected several offers in the $350,000 range during the summer. Finally, on August 16, 2021, he and the purchaser signed a contract to sell for $363,000. The sale (i.e., closing) took place on September 7, 2021. The closing statement showed the following disbursements: Real estate agent's commission $21,780 Appraisal fee 600 Exterminator's certificate 300 Recording fees 800 Mortgage to First Bank 305,000 Cash to seller 34,520 Wesley's adjusted basis for the house is $200,000. He owned and occupied the house for seven years. On October 1, 2021, Wesley purchases another residence for $325,000. If an amount is zero, enter "0". a. Calculate Wesley's recognized gain on the sale. b. What is Wesley's adjusted basis for the new residence? c. Assume instead that the selling price is $800,000. What is Wesley's recognized gain? His adjusted basis for the new residence?…
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