ACCT 401 - Chapter 11
fully solved & updated
Joe's Jalopies sold one of its warehouses for $300,000 cash plus a
tractor with a fair market value of $25,000. The building had a
mortgage against it for $50,000 that was assumed by the buyer and
an adjusted basis of $130,000. Joe's had to pay $20,000 in sales
commissions to the Realtor who coordinated the sale. What is the
amount realized by Joe's Jalopies? - answer $355,000
Reason:
$300,000+$25,000+$50,000 -$20,000 = $355,000
Christian received a gift from his aunt on January 4 of the current
year. His aunt had a basis of $9,000 in the item. At the date of the
gift, the item had a fair market value of $13,000. Christian's basis in
the item is $. - answer Blank 1: 9,000
Zack received a gift of stock from his uncle two years ago. Zack's
uncle had a basis in the stock of $4,000, but the fair market value of
the stock on the date it was given to Zack was only $1,500. Zack
held the stock until this year and just sold it for $4,200. What basis
in the stock will Zack use to determine his gain or loss on the sale of
the stock? - answer $4,000
Mandy inherited stock upon the death of her uncle. Mandy's uncle
had only owned the stock for 6 months before he died. He had a
basis of $6,000 in the stock. At the date of death, the stock was
valued at $6,800. Mandy sold the property three months after
receiving it from the estate. What is the amount of Mandy's basis in
the stock and her holding period? - answer Basis = $6,800; Long-
term holding period
, Three years ago, Katie remodeled her home. Rather than discarding
some shelving units that were in her home, she moved them to the
employee lounge of the business that she owns. Her original cost
(basis) in the shelves was $3,500. The fair market value of the
shelves when she converted them to business use was $2,500. Katie
has taken depreciation on the shelves of $300. She sold the shelving
units this year for $3,600. What is the amount of her basis and the
amount of the gain or loss recognized on the sale of the shelves? -
answer Katie's basis is $3,200 and her gain is $400.
The from a sale or other disposition of an asset is everything of
value received from the buyer less any selling costs. - answer Blank
1: amount
Blank 2: realized
Darla owns a dress shop called Darla's Darling Dresses. During the
past year, Darla sold some assets to upgrade her facility. She sold
racks and shelving units for $600 cash. In addition to the cash, the
buyer gave two mannequins worth a total of $200 to Darla. The
racks and shelving units had an original cost of $2,500 and had
accumulated depreciation for tax purposes of $2,200. Darla's
amount realized on the sale is $ and the adjusted basis in the assets
sold is $, producing a realized on the sale of $. - answer Blank 1:
800
Blank 2: 300
Blank 3: gain
Blank 4: 500
Troy received a gift of 100 shares of stock from his grandmother on
July 1 of the current year. Troy's grandmother had owned the stock
for fifteen years and had a basis of $14 per share. On July 1, the
date of the gift, the stock was selling for $39 per share. What is
Troy's basis in the stock? - answer $14 per share
fully solved & updated
Joe's Jalopies sold one of its warehouses for $300,000 cash plus a
tractor with a fair market value of $25,000. The building had a
mortgage against it for $50,000 that was assumed by the buyer and
an adjusted basis of $130,000. Joe's had to pay $20,000 in sales
commissions to the Realtor who coordinated the sale. What is the
amount realized by Joe's Jalopies? - answer $355,000
Reason:
$300,000+$25,000+$50,000 -$20,000 = $355,000
Christian received a gift from his aunt on January 4 of the current
year. His aunt had a basis of $9,000 in the item. At the date of the
gift, the item had a fair market value of $13,000. Christian's basis in
the item is $. - answer Blank 1: 9,000
Zack received a gift of stock from his uncle two years ago. Zack's
uncle had a basis in the stock of $4,000, but the fair market value of
the stock on the date it was given to Zack was only $1,500. Zack
held the stock until this year and just sold it for $4,200. What basis
in the stock will Zack use to determine his gain or loss on the sale of
the stock? - answer $4,000
Mandy inherited stock upon the death of her uncle. Mandy's uncle
had only owned the stock for 6 months before he died. He had a
basis of $6,000 in the stock. At the date of death, the stock was
valued at $6,800. Mandy sold the property three months after
receiving it from the estate. What is the amount of Mandy's basis in
the stock and her holding period? - answer Basis = $6,800; Long-
term holding period
, Three years ago, Katie remodeled her home. Rather than discarding
some shelving units that were in her home, she moved them to the
employee lounge of the business that she owns. Her original cost
(basis) in the shelves was $3,500. The fair market value of the
shelves when she converted them to business use was $2,500. Katie
has taken depreciation on the shelves of $300. She sold the shelving
units this year for $3,600. What is the amount of her basis and the
amount of the gain or loss recognized on the sale of the shelves? -
answer Katie's basis is $3,200 and her gain is $400.
The from a sale or other disposition of an asset is everything of
value received from the buyer less any selling costs. - answer Blank
1: amount
Blank 2: realized
Darla owns a dress shop called Darla's Darling Dresses. During the
past year, Darla sold some assets to upgrade her facility. She sold
racks and shelving units for $600 cash. In addition to the cash, the
buyer gave two mannequins worth a total of $200 to Darla. The
racks and shelving units had an original cost of $2,500 and had
accumulated depreciation for tax purposes of $2,200. Darla's
amount realized on the sale is $ and the adjusted basis in the assets
sold is $, producing a realized on the sale of $. - answer Blank 1:
800
Blank 2: 300
Blank 3: gain
Blank 4: 500
Troy received a gift of 100 shares of stock from his grandmother on
July 1 of the current year. Troy's grandmother had owned the stock
for fifteen years and had a basis of $14 per share. On July 1, the
date of the gift, the stock was selling for $39 per share. What is
Troy's basis in the stock? - answer $14 per share
