Rock Properties recently purchased a building that generates Gross Rental Income of $190,000 per year and Net Operating Income of $125,000 per year. Rock paid $250 per square foot for the 3,000 square foot building. What was the capitalization rate based on the purchase price?     a. 25.3%   b. 65.8%   c. 16.7%   d. 12.5%   e. None of the above.

Q: Hauswirth Corporation sold (or exchanged) a warehouse in year 0. Hauswirth bought the warehouse…

A: Answer to question a. Purchase cost of warehouse $65,000 Less: Depreciation claimed till year 0…

Q: A firm purchased $120,000 worth of light general-purpose trucks. The operations of the trucks lead…

A: The internal rate of return, or IRR, can be used to determine the return on investment of an…

Q: On May 1, Jack Costanza paid $100,000 for a residential rental property. This purchase price…

A: Property is the part of long term asset. It can be an equipment, appliances, furniture, real-estate…

Q: At the beginning of the current year, Dianne company purchased a tract of land for P6,000,000.  The…

A: Total Sales:- It is the value of those goods which are ready for sale in the market including profit…

Q: Sohar steel LLC is planning to purchase a building for OR.800,000. Acquisition cost of building…

A: Equivalent annual cost for the first cost is the annual cost of the first cost calculated by present…

Q: The Yeet Corporation purchased an office building several years for $200,000. The company took…

A: Section 1231 property is one that is retained by the company for more than one year for use in…

Q: Sisig Corp. purchases a building with land at a cost of P100,000,000. In the sale and purchase…

A: Investment property is the capital assets that are used to earn rental income or capital…

Q: You have an opportunity to acquire a property from First Capital Bank. The ban obtained the property…

A: Future value is the value of investment on the future date at specified rate of return

Q: In 20X6, Hat Corporation exchanged an apartment complex in Dallas (purchased in 20X2; cost $540,000;…

A: GIVEN   In 20X6, Hat Corporation exchanged an apartment complex in Dallas (purchased in 10 * 2 cost…

Q: ABC Inc. purchased machinery for $600861 which is used through the end of Year 2. The machine falls…

A: CCA Tax Shields = Depreciation * Tax rate for each years - Tax shield on sale value   Year 1 (600861…

Q: A piece of equipment was purchased for $1, 200 and depreciated on a straight-line basis to $140 over…

A: Under the straight-line method of depreciation, the fixed asset is depreciated with an equal amount…

Q: You manage a real estate investment company. One year ago, the company purchased 10 parcels of land…

A: calculation of above requirement with all necessary working are as follows

Q: Specialty Machining, Inc. bought a new multi-turret turning center for $250,000. The machine…

A: After Tax Net Present worth : It means the present value of residual  total cash inflow after tax…

Q: Silver Company purchased a machine for use in the business. The purchase price was $55,000 and the…

A: The cost related to an asset which is to be used by the company for a longer period of time is to be…

Q: Company J bought a piece of equipment for $200,000. This equipment has a useful life of 10 years and…

A: The carrying amount is also known as the book value of the asset. The carrying amount of the current…

Q: 1. Given this information, determine the value of the terminal loss or recapture at the end of the…

A: 1       Year Opening Balance Depreciation = Opening balance * 30% Closing Balance 1 1,00,000…

Q: Corrine Company owns a warehouse that it no longer needs in its own operations. The warehouse was…

A: In the above question we have asked to calculate profit after tax in the given situation which are…

Q: On October 1, you purchased a residential home in which lo locale your professional office for…

A: The given information: Price of the building is $150,000. Price of the land is $30,000.

Q: An asset with initial cost base of 6 million was bought 5 years ago. At the end of the current year…

A: The assets which possess a natural capability for growing or procreating themselves which lead to…

Q: An asset with initial cost base of 6 million was bought 5 years ago.At the end of the current year…

A: Asset is referred to as a resource which is occupied to attain benefits. Assets include plant,…

Q: Amazing Brentwood Inc bought a long-term asset for $100,000. The asset has a 30% CCA rate. At the…

A: Depreciation means reduction in the value of an asset. Given in the question: Asset purchase value =…

Q: Troy Industries purchased a new machine 4 year(s) ago for $80,000. It is being depreciated under…

A: Initial cost = $80,000 Tax rate = 21%

Q: McFadden Company owns equipment with a cost of $475,000 and accumulated depreciation of $280,000…

A: Lease is a contract between two parties in which one party provides its asset for use to another…

Q: A piece of equipment purchased at a cost $250,000 generated new income of $80,000 per year, witha…

A: In accountancy, taxes are paid on the income that is available after deducting all the operating…

Q: ABC Company sells to XYZ, 5 used factory equipment, each of which was acquired at P20,000, 3 years…

A: Loss from sale of equipment is the difference between the receipt from sales and cost less…

Q: Prepare a differential analysis on February 21 as to whether Duncan Company should lease…

A: Incremental Analysis: Incremental analysis refers to the analysis of differential revenue that could…

Q: An asset that was originally purchased for $60,818 is being depreciated straight-line over its…

A: Cost = $  60818 Depreciated value = 83% Book value at the time of sale = Cost*(1-Depreciated value)…

Q: Dungan Corporation is evaluating a proposal to purchase a new drill press to replace a less…

A: The Net Present Value: The net present value is a capital budgeting technique that is used to…

Q: Joyce purchased the building in which their corporate office is housed on 1/1/21 for $4,700,000.…

A: Here discuss about the details of the options of purchase which was made either for the borrowing or…

Q: Company H owns a conveyor belt that costs $85,000 with a residual value of $5,000 and a useful life…

A: Cost of conveyor= $85,000 Residual value= $5,000 Useful life= 10 years Sale value of asset= $61,000

Q: Hauswirth Corporation sold (or exchanged) a warehouse in year 0. Hauswirth bought the warehouse…

A: Here discuss about the topic of Amount Realized on the sale of assets and any kind of amount…

Q: McFadden Company owns equipment with a cost of $475,000 and accumulated depreciation of $280,000…

A: The income statement shows the net income or net loss that is calculated by deducting the expenses…

Q: Turtle Corporation is a calendar year C Corporation formed in 2017. Turtle purchased a motel…

A: Allowable deprecation deduction in US is computed based on MACRS depreciation rate. As per MACRS…

Q: A company purchased a new forging machineto manufacture disks for airplane turbine engines.The new…

A: Depreciation refers to the fall in the book value of an asset each year. Depreciable amount is…

Q: Smitty Inc. wishes to use the revaluation model for this property: Before Revaluation • Building…

A: The question is based on the concept of revaluation of asset and its impact on calculation of…

Q: Champion Toys just purchased some MACRS 5-year property at a cost of $230,000. The MACRS rates are…

A: Given Cost = $230000 MACR Rates = 20%,32%,19.20%, 11.52% and 5.76% for year 1-6

Q: in the current year, Keyaki Construction Company exchanged a building, which cost $530,000 and had…

A: Tax basis of new building = (Cost of old building - accumulated depreciation) + Cash paid

Q: f P2,500,000

A: The allocation cost is given as,

Q: The historical cost of land and building of Airbag Ltd that purchased three years ago are $500 000…

A: Yearly depreciation of building (before revaluation) = Cost - Residual value Estimated useful life…

Q: A Hat company bought a new machine for $1,000. This equipment has a useful life of 15 years and a…

A: Given: Company H bought a new machine for $1,000 The useful life of 15 years Salvage value of $200…

Q: Company x bought a house and lot for $1,500,000. The value of the land was appraised at $900,000 and…

A: The question is related to Property, Plant and Equipment. As per IAS 16 the Cost of Property, Plant…

Q: Anax Corporation purchased a long-term asset for $100,000. The asset has a 30% CCA rate. At the end…

A: Under the CCA rule of capital allowance, the deprecation is charged at on the reducing balance of…

Q: A division of Raytheon owns a 5-year-old turret lathe used to manufacture fabricated metal products…

A: Incremental Analysis: Incremental analysis is a technique that is used to compare different projects…

Q: 18. Ryland Company, a calendar year taxpayer, purchased commercial realty for $2 million and…

A: Depreciation is the lessening in the worth of a fixed asset due to obsolescence, erosion or normal…

Q: In December 20x8, the Aliz Co. purchased land for P300,000. The land was held until December 20x9,…

A: Profit on Sale of Asset: When an asset is sold for more than its carrying value, a gain on the sale…

Q: cash flow associated with the sale of the machine?

A: Cash Flow is the outcome of the invested sum in any asset. Here, the investment is in the purchase…

Q: Timberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price…

A: Depreciation is the reduction in the value of asset due to its use, wear and tear. There are…

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.