TPW, a calendar year taxpayer, sold land with a $535,000 tax basis for $750,000 in February. The purchaser paid $75,000 cash at closing and gave PW an interest-bearing note for the $675,000 remaining price. In August, PW received a $55,950 payment from the purchaser consisting of a $33,750 principal payment and a $22,200 interest payment.Required:a. Compute gain realized on the sale.b. Compute gain recognized in the year of sale if TPW elects not to use the installment sale method of accounting. Compute PW's tax basis in the note at the end of the year.c. Compute gain recognized in the year of sale if TPW uses the installment sale method of accounting. Compute PW's tax basis in the note at the end of the year. TPW, a calendar year taxpayer, sold land with a $535,000 tax basis for $750,000 in February. The purchaser paid $75,000 cash at closing and gave TPW an interest-bearing note for the $675,000 remaining price. InAugust, TPW received a $55,950 payment from the purchaser consisting of a $33,750 principal payment and a $22,200 interest payment.Required:a. Compute gain realized on the sale.b. Compute gain recognized in the year of sale if TPW elects not to use the installment sale method of accounting. Compute TPW's tax basis in the note at the end of the year.c. Compute gain recognized in the year of sale if TPW uses the installment sale method of accounting. Compute TPW's tax basis in the note at the end of the year.Complete this question by entering your answers in the tabs below.Required A Required B Required CCompute gain realized on the sale.Gain realized on saleTPW, a calendar year taxpayer, sold land with a $535,000 tax basis for $750,000 in February. The purchaser paid $75,000 cash at closing and gave TPW an interest-bearing note for the $675,000 remaining price. InAugust, TPW received a $55,950 payment from the purchaser consisting of a $33,750 principal payment and a $22,200 interest payment.Required:a. Compute gain realized on the sale.b. Compute gain recognized in the year of sale if TPW elects not to use the installment sale method of accounting. Compute TPW's tax basis in the note at the end of the year.c. Compute gain recognized in the year of sale if TPW uses the installment sale method of accounting. Compute TPW's tax basis in the note at the end of the year.Complete this question by entering your answers in the tabs below.Required ARequired BRequired CCompute gain recognized in the year of sale if TPW elects not to use the installment sale method of accounting. ComputeTPW's tax basis in the note at the end of the year.AmountGain recognizedTPW's tax basis in noteTPW, a calendar year taxpayer, sold land with a $535,000 tax basis for $750,000 in February. The purchaser paid $75,000 cash at closing and gave TPW an interest-bearing note for the $675,000 remaining price. InAugust, TPW received a $55,950 payment from the purchaser consisting of a $33,750 principal payment and a $22,200 interest payment.Required:a. Compute gain realized on the sale.b. Compute gain recognized in the year of sale if TPW elects not to use the installment sale method of accounting. Compute TPW's tax basis in the note at the end of the year.c. Compute gain recognized in the year of sale if TPW uses the installment sale method of accounting. Compute TPW's tax basis in the note at the end of the year.Complete this question by entering your answers in the tabs below.Required A Required BRequired CCompute gain recognized in the year of sale if TPW uses the installment sale method of accounting. Compute TPW's tax basisin the note at the end of the year. (Round gross profit percentage to 2 decimal places, and other intermediate calculations tothe nearest whole dollar amount.)AmountGain recognizedTPW's tax basis in note

Question

TPW, a calendar year taxpayer, sold land with a $535,000 tax basis for $750,000 in February. The purchaser paid $75,000 cash at closing and gave PW an interest-bearing note for the $675,000 remaining price. In August, PW received a $55,950 payment from the purchaser consisting of a $33,750 principal payment and a $22,200 interest payment.Required:a. Compute gain realized on the sale.b. Compute gain recognized in the year of sale if TPW elects not to use the installment sale method of accounting. Compute PW's tax basis in the note at the end of the year.c. Compute gain recognized in the year of sale if TPW uses the installment sale method of accounting. Compute PW's tax basis in the note at the end of the year. TPW, a calendar year taxpayer, sold land with a $535,000 tax basis for $750,000 in February. The purchaser paid $75,000 cash at closing and gave TPW an interest-bearing note for the $675,000 remaining price. InAugust, TPW received a $55,950 payment from the purchaser consisting of a $33,750 principal payment and a $22,200 interest payment.Required:a. Compute gain realized on the sale.b. Compute gain recognized in the year of sale if TPW elects not to use the installment sale method of accounting. Compute TPW's tax basis in the note at the end of the year.c. Compute gain recognized in the year of sale if TPW uses the installment sale method of accounting. Compute TPW's tax basis in the note at the end of the year.Complete this question by entering your answers in the tabs below.Required A Required B Required CCompute gain realized on the sale.Gain realized on sale< Required ARequired B >TPW, a calendar year taxpayer, sold land with a $535,000 tax basis for $750,000 in February. The purchaser paid $75,000 cash at closing and gave TPW an interest-bearing note for the $675,000 remaining price. InAugust, TPW received a $55,950 payment from the purchaser consisting of a $33,750 principal payment and a $22,200 interest payment.Required:a. Compute gain realized on the sale.b. Compute gain recognized in the year of sale if TPW elects not to use the installment sale method of accounting. Compute TPW's tax basis in the note at the end of the year.c. Compute gain recognized in the year of sale if TPW uses the installment sale method of accounting. Compute TPW's tax basis in the note at the end of the year.Complete this question by entering your answers in the tabs below.Required ARequired BRequired CCompute gain recognized in the year of sale if TPW elects not to use the installment sale method of accounting. ComputeTPW's tax basis in the note at the end of the year.AmountGain recognizedTPW's tax basis in note< Required ARequired C >TPW, a calendar year taxpayer, sold land with a $535,000 tax basis for $750,000 in February. The purchaser paid $75,000 cash at closing and gave TPW an interest-bearing note for the $675,000 remaining price. InAugust, TPW received a $55,950 payment from the purchaser consisting of a $33,750 principal payment and a $22,200 interest payment.Required:a. Compute gain realized on the sale.b. Compute gain recognized in the year of sale if TPW elects not to use the installment sale method of accounting. Compute TPW's tax basis in the note at the end of the year.c. Compute gain recognized in the year of sale if TPW uses the installment sale method of accounting. Compute TPW's tax basis in the note at the end of the year.Complete this question by entering your answers in the tabs below.Required A Required BRequired CCompute gain recognized in the year of sale if TPW uses the installment sale method of accounting. Compute TPW's tax basisin the note at the end of the year. (Round gross profit percentage to 2 decimal places, and other intermediate calculations tothe nearest whole dollar amount.)AmountGain recognizedTPW's tax basis in note< Required BRequired C >

Accepted Answer

An instalment sale is one of several ways to recognise revenue under Generally Accepted Accounting…