before a person borrows money from a bank to make a major purchase, which question is considered most important for the person to answer?

Answers

Answer 1

The most important question that the person needs to answer before taking a loan for major purchase is: "Whether the benefits of making the purchase is more than the cost of borrowing?". This is the cost-benefit theory which determines whether an investment or purchase should be undertaken or not.

Taking a loan from bank involves paying the cost of borrowing in the form of interest rates. The person has to repay the original principle amount along with interest rates. The person should only make the purchase if the benefits and satisfaction received from making the purchase is more than the costs involved in taking the loan.

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Related Questions

an insured under a personal auto policy has his corvette smashed into a tree by a flood. how would his policy respond?

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An insured under a personal auto policy has his corvette smashed into a tree by a flood. His policy would respond other than collision pays.

Collision insurance covers damage to your car brought on by flipping it over or colliding with an object (such as a telephone pole, a guard rail, or a mailbox). The typical annual expense is around $290. Your deductible is subtracted from the cost of repairs when you have collision insurance.

Following the payment of your deductible, collision coverage assists in covering the cost of repairing or replacing your car up to its real cash worth.

In the event of a covered accident involving a collision with another vehicle, collision insurance covers damage to your vehicle. This can entail making repairs to your insured car or replacing it entirely.

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people like waitstaff, bartenders, dining room managers, and hosts are expected to dress and act appropriately to interact with patrons and work as part of what staff? front of the house line cooks back of the house sanitary crew

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Front-line staff such as reservationists,parking attendants, hosts and receptionists,bartenders,servers,and bus staff,are primarily responsible for them.

In this type of service,diners take plates from the stack and head to the buffet counter where food is stored in large pans and trays with burners. Guests can serve themselves,or they can ask the server behind the buffet table to serve.A host or hostess is responsible for greeting, welcoming, and seating customer as they enter a restaurant or dining room.The waiters prepare the tables for the new customers by removing the dirty dishes. and cleaning the table top. Since they spend a lot of time in the dining room, they must wear clean aprons and adopt a professional attitude.The waiter, using two large silver serving forks in his hand, places the food on the guests' plates.Each food is served by the waiter from sources to their individual plates.

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mainstream economists have adopted some ideas from ret and some rational expectations assumptions are being incorporated into current macroeconomic models. group of answer choices false true

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The term "mainstream economics" refers to the orthodox or "neoclassical" school of thought in which all participants are rationally motivated and markets are guided by an invisible hand. Adam Smith's ideas are where modern economics got its start.

What do mean by Mainstream economists ?

The dominant theory envisions an economic system in which there can never be a crisis, i.e., a system in which:

1) monetary authorities control money supply but not credit supply, which depends on saving decisions;

2) banks are merely intermediaries that do not create risks; and

3) the process of wealth creation.

Economic theories that depart from conventional wisdom or neoclassical principles are referred to as heterodox. Despite the fact that the majority of economists support traditional economic theories, they frequently turn to neoclassical notions of market equilibrium and rationality.Prices are lowered in a market where there is competition. The economy as a whole benefits from more individuals having the means to purchase goods, which is excellent for consumers as well as businesses.

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mashasito is borrowing $18,000 to buy a car. the terms of the loan call for monthly payments for three years at 6 percent interest. what is the amount of each payment?

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The amount of each payment is $547.59.

Payment Amount means any loan advance unpaid administrator advance, unpaid indemnification liability, or any other amount required to be funded by Lender under this Agreement. Monthly installments are the amounts paid each month to pay off the loan over the term of the loan.

When you take out a loan, you have to repay not only the principal and the amount you borrowed, but also accrued interest. The total invoice amount is the expected payment amount on the invoice date. This includes opening balances new purchases fees, funding costs less previous payments, or other outstanding balances.

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why is direct-to-consumer marketing of diagnostic tests for mental illness and behavioral problems a dangerous practice?

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Behavioral problems a dangerous practice our emotional, psychological, and social well-being are all parts of our mental health. It affects our thoughts, emotions, and behaviours.

It also helps us to decide how we respond to stress, interact with people, and make good decisions. Every stage of life—from childhood and youth to adulthood—involves the importance of mental health.The term "diagnostic" refers to anything that assists in locating a problem or sickness. A car's emissions test is an illustration of a diagnostic test.

A symptom that is typical of a certain condition and helps doctors identify it is an example of a diagnostic sign. A exam is considered to be "standardised" if it is given and scored in a predictable, or "standard," way.Standardized tests are set up so that the questions and interpretations are consistent, and they are given and scored in a preset, uniform method.

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what is the present worth of a two-part legal settlement if the interest rate is 4%? $100,000 is received at the end of year 1 and $400,000 at the end of year 5.

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424924.69 dollars are the present value. Here, r is 4%. So, PV = 100000/1.04 + 400000/1.045 = 96153.85 + 328770.84 = 424924.69$.

The present value of a sum of money or stream of cash flows that will occur in the future at a specific rate of return (PV). Future cash flows are discounted using the discount rate, and as the discount rate rises, so does the present value of those future cash flows.

The term "present value" refers to the value of a sum of money now, given its future value. The present value, for instance, is the value of $110 right now if you are promised it in a single year.

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because it allows clients and investors, who might not be familiar with more evolved tools, to visualize the entire project at a glance, one of the first creations of a project manager is a

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because it allows clients and investors, who might not be familiar with more evolved tools, to visualize the entire project at a glance, one of the first creations of a project manager is a PERT network chart. Thus option B is correct.

What is a Project manager?

A Project manager refers to a person who is responsible head of any project and helps in arranging the resources, checking the progress, and timely completion of it.

The project management tool used to design, arrange, and oversee a project's tasks is the PERT chart. Project managers can analyze each individual piece of the project's work by breaking it down into its component parts using the graphical roadmap it provides.

Therefore, option B is appropriate.

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Point-of- are product aociation that are not necearily unique to the brand but may in fact be hared with brand

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Points-of-parity are those associations not necessarily unique to the brand but perhaps shared with other brands. those associations designed to negate competitors' points-of-difference or overcome perceived weaknesses or vulnerabilities of the brand.

A brand requires points of parity in order to be taken into account by the consumer. In this case, a brand's similarity to others may give customers the impression that it is "good enough" to be discussed.

Any area in which your company is equivalent to that of your rivals and is taken into account by clients when making purchases is known as a point of parity. The characteristics of goods or services that create differentiation are referred to as their point of difference.

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describe the difference between independent and dependent demand and give an example of each for a pizza restaurant

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Demand for a production plan, any such laptop, motorbike, or pizza, is considered to as independent demand. Demand for subcomponents or structural components, on the other hand, is known as dependent demand.

For example, this would include the computer systems in the computer, the pedals on the motorcycle, or the mozzarella on the pizza. When demand for an item is independent of desire for other items, that item is considered to fall under the category of independent demand. final products Independent demand items are those that are produced for stock and sale or ordered by external customers. Dependent demand items, also known as components, structural components, produced parts, purchasing parts, and agricultural products, are goods whose consumption is generated by the one-by-one estimate based on independent demand items, such as goods and service parts.

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the term consumer sovereignty refers to: group of answer choices the fact that the consumer is king in a market economy, and this dictator will harshly punish any firm that does not quickly respond to his dollar votes. the fact that the consumer is ruled by the corporation and must play by its set of rules. the fact that the government is ruled by the consumer, which in turn is ruled by the corporation.

Answers

Consumer sovereignty refers that consumer is king in a market economy.

The correct option is a.

The economic principle of "consumer sovereignty" holds that the customer has some control over the products that are produced and that they are the best arbiters of their own wellbeing.

The ability of consumers to decide what end goods should be made from scarce resources, as opposed to the owners of those resources, is known as consumer sovereignty in production. The idea that consumer demand drives the creation of products and services is occasionally put up as a hypothesis .

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leadership is the ability to marshal human, informational, and other resources to get something done.truefalse

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It's untrue to say that leadership is the capacity to coordinate people, information, and other resources.

What is information?

Information is a general term for everything with the capacity to inform. Information is most fundamentally concerned with the interpretation of what may be sensed. Any naturally occurring process that is not entirely random, as well as any discernible pattern in any medium, can be said to convey some level of information.

The main goal of relationship-oriented leadership behavior is to make sure that people, tools, and other resources are used effectively to carry out a group's or organization's mission. Leadership in the initiation of structures is more focused on task completion than on employee retention or happiness. information

Therefore, The Coordination of people, information, and other resources is a quality of leadership.

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the trend within organizations is to move towards variable pay and expanded eligibility compared to fixed pay structures. group of answer choices true false

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The statement id False, the trend within organizations is to move towards variable pay and expanded eligibility compared to fixed pay structures.

A firm, institution, group, or other type of body made up of one or more people and serving a specific function is referred to as an organizations. A wide range of legal entities exist, including corporations, governments, non-governmental organizations, political groups, international organizations, armed forces, charities, for-profit businesses, partnerships, cooperatives, and educational institutions, among others. A hybrid organization is one that performs public functions and creates commercial market activity simultaneously in the public and private sectors. A volunteer-run organization is referred to as a voluntary association. Depending on the jurisdiction, these organizations, such as informal clubs or coordinating bodies, may be able to operate without having to comply with legal requirements. These organizations must have a goal in mind, which it is possible for them to express through a manifesto, mission statement, or in a more informal way by how they act. In the case of secret societies, criminal organizations, and resistance groups, organizations may also function covertly or unlawfully. Additionally, in some circumstances, other groups (such as MLK's organization) may present impediments.

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which of the following is not one of the common methods for producing a net charge on an object?

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Production of additional charges of a particular sign by strong pressurization or depressurization is not one of the common methods for producing a net charge on an object.

"Net" refers to the sum after positive and negative charges have been included. When an atom contains more electrons than protons, this is referred to as having a net charge on it. Because the charges add up to positive and negative values, the +1 charge entirely cancels out the -1 charge. The SI unit for net charge is the coulomb.

If there are more protons than electrons, the net charge of the thing is positive. If an object has more electrons than protons, it has a negative charge. If the protons and electrons in a thing are equal, the object is electrically neutral.

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Bug-Off Exterminators provides pest control services and sells extermination products manufactured by other companies. Following is the company's unadjusted trial balance as of December 31, 2021.


December 31, 2021
Unadjusted Trial Balance
Debit Credit
Cash $ 19,200
Accounts receivable 20,570
Allowance for doubtful accounts $ 850
Merchandise inventory 15,000
Trucks 43,000
Accumulated depreciation—Trucks 0
Equipment 51,600
Accumulated depreciation—Equipment 14,070
Accounts payable 5,550
Estimated warranty liability 1,950
Unearned services revenue 0
Interest payable 0
Long-term notes payable 26,000
Common stock 21,000
Retained earnings 63,600
Dividends 21,000
Extermination services revenue 82,000
Interest revenue 894
Sales (of merchandise) 93,826
Cost of goods sold 49,600
Depreciation expense—Trucks 0
Depreciation expense—Equipment 0
Wages expense 46,000
Interest expense 0
Rent expense 20,000
Bad debts expense 0
Miscellaneous expense 1,270
Repairs expense 13,500
Utilities expense 9,000
Warranty expense 0
Totals $ 309,740 $ 309,740

The following information in a through h applies to the company at the end of the current year.

The bank reconciliation as of December 31, 2021, includes the following facts.

Cash balance per bank $ 16,200
Cash balance per books 19,200
Outstanding checks 2,350
Deposit in transit 3,000
Interest earned (on bank account) 74
Bank service charges (miscellaneous expense) 26

Reported on the bank statement is a canceled check that the company failed to record. (Information from the bank reconciliation allows you to determine the amount of this check, which is a payment on an account payable.)


An examination of customers’ accounts shows that accounts totaling $690 should be written off as uncollectible. Using an aging of receivables, the company determines that the ending balance of the Allowance for Doubtful Accounts should be $755.
A truck is purchased and placed in service on January 1, 2021. Its cost is being depreciated with the straight-line method using the following facts and estimates.

Original cost $ 43,000
Expected salvage value $ 12,400
Useful life (years) 4
Two items of equipment (a sprayer and an injector) were purchased and put into service in early January 2019. They are being depreciated with the straight-line method using these facts and estimates.
Sprayer Injector
Original cost $ 29,200 $ 22,400
Expected salvage value $ 3,000 $ 3,600
Useful life (years) 8 5
On September 1, 2021, the company is paid $15,900 cash in advance to provide monthly service for an apartment complex for one year. The company began providing the services in September. When the cash was received, the full amount was credited to the Extermination Services Revenue account.
The company offers a warranty for the services it sells. The expected cost of providing warranty service is 2.50% of the extermination services revenue of $71,400 for 2021. No warranty expense has been recorded for 2021. All costs of servicing warranties in 2021 were properly debited to the Estimated Warranty Liability account.
The $26,000 long-term note is an 8%, five-year, interest-bearing note with interest payable annually on December 31. The note was signed with First National Bank on December 31, 2021.
The ending inventory of merchandise is counted and determined to have a cost of $13,900. Bug-Off uses a perpetual inventory system.

Required:
1. Determine amounts for the following items:

Correct (reconciled) ending balance of Cash; and the amount of the omitted check.
Adjustment needed to obtain the correct ending balance of the Allowance for Doubtful Accounts.
Depreciation expense for the truck used during year 2021.
Depreciation expense for the two items of equipment used during year 2021.
The adjusted 2021 ending balances of the Extermination Services Revenue and Unearned Services Revenue accounts.
The adjusted 2021 ending balances of the Warranty Expense and the Estimated Warranty Liability accounts.
The adjusted 2021 ending balances of the Interest Expense and the Interest Payable accounts.
2. Use the results of part 1 to complete the six-column table by first entering the appropriate adjustments for items a through g and then completing the adjusted trial balance columns. Hint: Item b requires two adjustments.
3. Prepare journal entries to record the adjustments entered on the six-column table. Assume Bug-Off’s adjusted balance for Merchandise Inventory matches the year-end physical count.
4a. Prepare a single-step income statement for 2021.
4b. Prepare the statement of retained earnings (cash dividends during 2021 were $21,000), for 2021.
4c. Prepare a classified balance sheet for December 31, 2021.

Answers

Correct (reconciled) ending balance of Cash: $17,300

Amount of the omitted check: $690

Adjustment needed to obtain the correct ending balance of the Allowance for Doubtful Accounts: $755 - $850 = -$95

Depreciation expense for the truck used during year 2021: $43,000 - $12,400 / 4 = $9,600

Depreciation expense for the two items of equipment used during year 2021: ($29,200 - $3,000) / 8 + ($22,400 - $3,600) / 5 = $3,650 + $3,600 = $7,250

The adjusted 2021 ending balances of the Extermination Services Revenue and Unearned Services Revenue accounts: $82,000 - $15,900 = $66,100 and $15,900

The adjusted 2021 ending balances of the Warranty Expense and the Estimated Warranty Liability accounts: $71,400 * 2.5% = $1,785 and $1,950 - $1,785 = $165

The adjusted 2021 ending balances of the Interest Expense and the Interest Payable accounts: $26,000 * 8% / 12 = $320 and $320

Adjusted Trial Balance

Debit Credit

Cash $ 17,300

Accounts receivable 20,570

Allowance for doubtful accounts $ -95

Merchandise inventory 13,900

Trucks 43,000

Accumulated depreciation—Trucks $ 9,600

Equipment 51,600

Accumulated depreciation—Equipment 21,320

Accounts payable 5,550

Estimated warranty liability 165

Unearned services revenue 15,900

Interest payable 320

Long-term notes payable 26,000

Common stock 21,000

Retained earnings 77,435

Dividends 21,000

Extermination services revenue 66,100

Interest revenue 894

Sales (of merchandise) 93,826

Cost of goods sold 49,600

Depreciation expense—Trucks $ 9,600

Depreciation expense—Equipment 7,250

Wages expense 46,000

Interest expense 320

Rent expense 20,000

Bad debts expense 690

Miscellaneous expense 1,296

Repairs expense 13,500

Utilities expense 9,000

Warranty expense 1,785

Totals $ 345,636 $ 345,636

Which of the following taxes are allowed as deduction while computing the business income?A. Wealth-taxB. Income-taxC. Sales taxD. None of the above

Answers

Sales tax is allowed as a deduction while computing the business income

Sales tax is a tax that is imposed on the sale of goods and services, and it is typically paid by the consumer. Businesses are required to collect the tax from their customers and remit it to the appropriate tax authorities. However, businesses may be able to claim a deduction for sales taxes paid on purchases.

These are the purchases that are used for business purposes and are not considered to be personal expenses. In order to claim this deduction, businesses must be able to provide documentation of the sales tax paid, such as receipts or invoices. The business must consider the rules for deducting sales tax may vary depending on the specific tax laws of the jurisdiction in which the business is located.

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choose the groups of performance measures typically used in the balanced scorecard approach.

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The groups of performance measures typically used in the balanced scorecard approach is financial, internal company processes, learning and development and customer views are the four categories that make up the balanced scorecard strategy.

Client definition: An individual or company who orders products or services from this other company is known as a customer. Customers are significant since individuals bring in money. Organizations could end

their existence absent them.

Customer service is defined as...

Customer care is the assistance you provide to your clients to make their interactions using company simple plus exciting, both when and when they obtain and utilize your products or services. If you wish to keep clients but instead scale your business, you

must provide exceptional service.

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a group of managers from various departments is in charge of evaluating the performance of the staff employees every year. this is a(n)

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a group of managers from various departments is in charge of evaluating the performance of the staff employees every year. this is a standing committee.

Members of Parliament, or MPs, make up a standing committee of the Indian Parliament. It is a regular, permanent committee that is occasionally created in line with a parliamentary legislation or the procedures for conducting business. These parliamentary committees handle a sizable percentage of the work that the Indian Parliament does because of the complexity and volume of that activity.

The committee structures in the Rajya Sabha and Lok Sabha, both Houses of Parliament, are similar with a few minor exceptions. Their election, terms in office, duties, and administrative procedures are basically the same.

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Amounts earned from delivering goods or services to customers are called ________.
A) notes receivable
B) unearned revenues
C) revenues
D) withdrawals

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Amounts which earned from delivering goods or services to customers are called revenues. It is option C.

It is revenue because the money earned after delivering goods or services to customers.

What is revenue?

Revenue is the money acquired by a company received mainly from the sale of its services or products to customers. A sales revenue is obtained when the seller previously delivered the goods being bought by the seller.

Revenue, also known as gross sales, is frequently referred to as the top line since it sits at the top of the income statement. Income itself, or net income, is a company's total profit or earnings.

Types of revenue include: the sale of goods, products, or merchandise; the sale of services, such as consulting; and, rental income from a commercial property.

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vertical analysis of financial statements is accomplished by preparing common-size statements. t or f

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True, the vertical analysis of financial statements is accomplished by preparing common-size statements.

Each line item in the income statement or balance sheet is expressed as a proportion of the total assets using vertical analysis. To create common-size statements, these percentages are computed. To determine how each line item fits into the overall picture of an income statement, balance sheet, or cash flow statement, we can utilize vertical analysis.

A type of examination and interpretation of the financial statement is the common size statement. Another name for it is vertical analysis. With this approach, each line item in the financial statements is analyzed in relation to the base amount for that specific accounting period.

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if a company earns $1,000 profit, has 100 shares issued and outstanding, and a share price of $2, what are the earnings per share?

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The earnings per share EPS would be equal to $1,000 / 100 = $10 per share.

To calculate the earnings per share (EPS) for a company, you would first need to determine the net income available to shareholders. This is the company's profit minus any dividends paid to preferred shareholders. If the company has no preferred shareholders and has issued 100 shares, the net income available to shareholders would be equal to the company's profit of $1,000.

To calculate the EPS, you would then divide the net income available to shareholders by the number of shares outstanding. This means that each share of the company's stock would earn $10 of net income. The EPS is an important metric for investors, as it provides a measure of how much profit a company is generating for each share of stock. It is often used to compare the profitability of different companies or to assess the potential return on an investment in a company's stock.

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if business schools take the approach that their students are a product of the school, who would be the customer?

Answers

the teachers

Explanation:

builders and construction firms expect that the price of copper will rise dramatically in the near future. demand; supply: equilibrium price: equilibrium quantity exchanged which determinant changed?

Answers

Demand:  No change in demand.

Supply: Decrease in supply

Equilibrium price: Increase in equilibrium price

Equilibrium quantity : Decrease in equilibrium quantity

Which determinant changed : The input price determines  change.

There is no change in demand .

Builders will reduce output because higher expected prices for inputs like copper will increase production costs.

Price will increase because the supply curve will shift left.

Quantity will decrease because the supply curve will shift to the left.

The Price of input determines the change.

What is Supply Curve?

The supply curve illustrates the relationship between the price of an item or service and the volume delivered over a specific time period. In a common situation, the amount supplied will be shown on the horizontal axis and the price will be shown on the left vertical axis.

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g investor-owners of a corporation are called which of the following? select one: a. profit and loss owners b. shareholders c. limited partners d. profit owners

Answers

B is the correct answer. A shareholder is someone who holds at least one share of a company's stock or unit in a mutual fund.

A shareholder can be an individual, business, or institution. Ownership of the corporation, in essence, rests with the shareholders, who also have specific obligations. They can benefit from a business's success thanks to this sort of ownership.

Increased stock prices or dividend payments are two ways that these benefits are given forth. In contrast, a company's share price will always fall when it experiences a loss, which might result in financial losses for shareholders or a deterioration in their portfolios.

Anyone who owns stock in a corporation—whether they are an individual, business, or institution—is a shareholder.

One share is the minimum amount that a shareholder of a firm may own.

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true or false: online review websites like yelp and tripadvisor should not be used for conducting reputation management

Answers

Online review websites like yelp and TripAdvisor should not be used for conducting reputation management. This statement was false. Thus, option (b) is correct.

What is websites?

World Wide Web pages that are typically linked to one another and are made available on the internet by a personal, firm, or institution. A list of web of websites pages and related stuff that share a similar domain name and are hosted on at least a Single.

According to the online reputation management, are the review websites are the used for the attract the customer for the increases the views on the website. It was the strategies to conducting reputation management.

As a result, the statement was false. Therefore, option (b) is correct.

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how does contractionary monetary policy affect real gdp, unemployment, and the price level in the short run?

Answers

The contractionary monetary policy affects by decreasing real GDP, rising unemployment rate and falling price level

Contractionary monetary policy refers to actions taken by a central bank,  to reduce the supply of money in the economy and tighten credit conditions. This type of policy is typically implemented in an effort to curb inflation or stabilize financial markets. In the short run, contractionary monetary policy can have a number of effects on the economy. These effects may include:

Increasing real GDP: The policy can lead to a decrease in aggregate demand, which can result in a decrease in real GDP in the short run. However, if the policy is successful in reducing inflation, it may lead to an increase in real GDP in the long run.

Falling unemployment rate: The policy can lead to a decrease in economic activity and job creation, which may result in a rise in the unemployment rate in the short run. However, if the policy is successful in reducing inflation, it may lead to a fall in the unemployment rate in the long run.

Rising price level: The policy can lead to a decrease in the supply of money and credit, causing price level to rise in the short run. However, if the policy is successful in reducing inflation, it may lead to a decrease in the price level in the long run.

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what are the primary factors that will determine whether debt snowballs out of control or slowly melts?

Answers

Whether financing economically worthwhile expenditures, like as infrastructure, through federal deficits.

Why does the federal deficit matter?

Debt-ridden nations will have less money to invest in their own future. Lessening economic chances for Americans as a result of rising debt. Rising debt discourages corporate investment and impedes economic expansion. Additionally, it raises predictions for rising inflation rates and a decline in confidence in the US dollar.

Is a federal deficit beneficial?

Theoretically, a rise in the fiscal deficit might stimulate a sluggish economy by increasing consumer spending and investment opportunities by giving people more money. However, long-term deficits may be harmful to stability and economic growth.

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pedro is the fastest package handler in your company. when you give him his annual performance review, you discount his misplacing of a few packages as a fluke. of what is this is an example? selective perception the contrast effect projection the halo effect

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Pedro is your company's fastest package handler. You ignore the fact that he lost a few parcels when you give him his annual performance review as an example of what the halo effect, selective perception, and the contrast effect.

The process through which people decide which stimuli to focus on out of the numerous options that are constantly being provided to their senses.

Selective perception: People perceive what they see differently depending on their interests, experiences, backgrounds, and attitudes. Projecting one's own traits onto others is known as projection. The halo effect is the process of forming an overall opinion of a person from only one trait.

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what is created when team members articulate and agree upon the goals, roles, leader, decision-making process, and meeting times for the team?

Answers

When team members clearly and mutually agree on the team's goals, positions, leader, procedure for making decisions, and meeting times, a team contract is produced.

The standards that are anticipated of all team members are laid out in a team contract.

It is approved during a team meeting and signed by all participants. Its purpose is to clearly define each team member's responsibilities while also fostering a supportive and collaborative environment.

A team contract is most frequently utilized when a new team is formed since it can assist the team come together and provide clear obligations for members who may be unfamiliar with the division or organization.

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a taxpayer bought a rental property in year 1 for $150,000. for years 1 and 2 the following was reported: year property (loss) agi 1 ($15,000 ) $ 100,000 2 (10,000 ) 140,000 in year 3, the property was sold for $175,000. the taxpayer did not actively participate in the rental activity in any of the three years. what amount of gain or loss, if any, is reported on the taxpayer's year 3 tax return as a result of the sale?

Answers

The amount of gain or loss that taxpayer is required to declare as a result of the sale on taxpayer's Year 3 tax return is $0. Taxpayer didn't engage in rental activity in any of the three years, therefore it wasn't active and there was no deduction.

What exactly qualifies as active involvement in a rental property?

Approving new tenants, setting rental terms, approving expenditures, and other similar actions are examples of management decisions that count as active participation. Active involvement in rental real estate activities is limited to people.

Are losses from passive activities permanently lost if a taxpayer is unable to claim them during the current tax year?

The loss can be carried forward until it is utilised or until the investment that produced the loss is sold if your client is unable to deduct a passive loss for the tax year due to a lack of passive income to offset it.

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on july 31, aloe inc. received $5,000 cash from a customer who previously purchased aloe's products on account. what entry should aloe inc. record at the time it receives cash?

Answers

Aloe should record, debit cash, $5,000; credit accounts receivable, $5,000. Therefore, option (C) is the correct answer.

The proceeds or money that the business will receive from its clients who have financed their purchases of its goods and services are known as accounts receivable (AR). The credit term is often brief, ranging from a few days to several months or even a full year in rare situations.

Receivable describes a payment that has not yet been realised. This implies that the business must have given its clients a credit limit. Typically, the business offers both cash and credit when selling its products and services.

When a business gives a customer credit, the sale occurs when the invoice is created, but the business gives the customer a grace period to pay the balance later.

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Complete Question:

On July 31, ALOE Inc. received $5,000 cash from a customer who previously purchased ALOE's products on account. What entry should ALOE Inc. record at the time it receives cash?

A) Debit Cash, $5,000; credit Service Revenue, $5,000.

B) Debit Accounts Receivable, $5,000; credit Cash, $5,000.

C) Debit Cash, $5,000; credit Accounts Receivable, $5,000.

D) Debit Cash, $5,000; credit Accounts Payable, $5,000.

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