Sam traded a parcel of land for a tractor and a car. He had purchased the land five years earlier for $16,000. The market value of the car and tractor is $20,000. What is the amount of gross income resulting from this transaction?

Answers

Answer 1

Answer:

Answer:

$4,000

Explanation:

Sam's gross income from this transaction can be calculated by subtracting the price of the car and the tractor from the cost basis of the land.

Sam's gross income = cost basis of land - price of car and tractor = $20,000 - $16,000 = $4,000

In this case Sam's gain should be considered capital gains since it is a gain made from the selling investments that are held for more than 1 year.

Answer 2

Answer:

Final answer:

The gross income from the transaction where Sam traded his land (originally bought for $16,000) for a tractor and car (worth $20,000) would be $4,000. This is calculated by subtracting the initial purchase price of the land from the market value of items received in return.

Explanation:

Based on the information given in your question, it seems like we're trying to calculate the gross income that resulted from Sam's sale of land. Gross income is essentially the net sales minus the cost of goods sold; in this case, the 'goods' are the land. So, you simply subtract Sam's original purchase price of the land ($16,000) from the later sale price (or market value) of the car and tractor he got in exchange ($20,000)

So, you calculate it as follows:

First, recognize the market value of the goods received in return for the land - in this case, the car and tractor, which amount to $20,000.
Then, subtract the initial purchase cost of the land - the $16,000 that Sam paid for it five years ago.
This leaves us with $20,000 - $16,000 = $4,000.

Therefore, Sam's gross income from this whole transaction is $4,000.

Learn more about Gross Income here:

brainly.com/question/547727

#SPJ2

Related Questions

(a)Belief that a company will remain in business for the foreseeable future. (Note: Do not use the historical cost principle.) (b) select the accounting assumption or principle Indicates that personal and business recordkeeping should be separately maintained. (c) select the accounting assumption or principle Only those things that can be expressed in money are included in the accounting records. (d) select the accounting assumption or principle Separates financial information into time periods for reporting purposes. (e) select the accounting assumption or principle Measurement basis used when a reliable estimate of fair value is not available. (f) select the accounting assumption or principle Dictates that companies should disclose all circumstances and events that make a difference to financial statement users.
A(n) _____ is something a person wants to get out of a job or that brings them job satisfaction.A.) Personal Value B.) Work Value C.) Aptitude D.) Interest
Which country has a Gross Domestic Product of about 8.5 trillion dollars?A) Japan B) China C) United States D) Russia
Which of the following is not an objective of financial reporting? Multiple Choice 1. To provide information about the fair value of an entity’s economic resources.2. To report financial performance from the perspective of cash inflows and outflows. 3. To provide indirect information about management’s performance in meeting its responsibilities for stewardship of the entity.Incorrect 4. To provide information that is useful to investors and creditors.
Determine whether the results appear to have statistical significance, and also determine whether the results appear to have practical significance. in a study of a gender selection method used to increase the likelihood of a baby being born a girl, 2097 users of the method gave birth to 1031 boys and 1066 girls. there is about a 23% chance of getting that many girls if the method had no effect.

What countries have a market economy?

Answers

the United States, Canada, Denmark, the United Kingdom, Hong Kong and Mauritius have a market economy.

Cartels are corporations that control almost all of the production and sale of a single product.true false

Answers

FALSE. Cartels are NOT CORPORATIONS that control almost all of the production and sale of a single product.

A cartel is an agreement between competing firms to control prices of goods. They may also come into agreement to hinder the entry of a new competitor.

A cartel rises in an oligopoly. This means that few sellers are in the market and these sellers control the price and production of various goods.

What does new technology generally do to production? a) It lowers cost and decreases supply.
b) It lowers cost and increases supply.
c) It increases cost and decreases supply.
d) It has very little effect on production.
Could you please help me with these questions?

Answers

B, Because the more you make, the more the cost will go down but that also means your going to have to have more material .

It lowers cost and increases supply.

Banks _____ the money supply because they _____ currency from circulation and place it in their vaults or deposit it at the Federal Reserve.

Answers

Answer:

Explanation:

Banks _control____ the money supply because they __withdraw___ currency from circulation and place it in their vaults or deposit it at the Federal Reserve.

A pension plan helps pay for ______.a. Health benefits
b. Convenience Benefits
c. Retirement Benefits
d. Charity Benefits

Answers

Answer: Retirement Benefits.

Explanation: Retirement is an act of withdrawing from one's occupation or post. Mostly when a person retires from a government job or highly valued private posts at a particular age, they are granted with a reasonable amount of money called Pension which covers the overall expenses of retired person and is regarded as a money for retirement benefits.

C retirement benefits. This is why retirees are sometimes called "pensioners"

Part II: Planning for Retirement1. Lynn has learned that she will need to save $1 million dollars to support her current
lifestyle if she retires in 15 years. Lynn had not thought about planning for retirement until
now. If she begins saving now, she will need to save approximately $67,000 per year.
Based on her annual income of $75,000, this goal is not attainable. How would Lynn's
retirement be affected if she had understood the importance of planning for retirement
earlier?

2. In three to four sentences, explain how you would develop a long-term investing strategy
to ensure that you will have a financially secure retirement.

PLEASE HELP! I WILL MARK YOU THE BRAINLIEST:)

Answers

Final answer:

Lynn would have benefited from planning for retirement earlier due to a longer savings period and the benefits of compound interest. A long-term investing strategy involves setting clear financial goals, regular contributions, diversification, and regular reviews.

Explanation:

If Lynn had started planning for her retirement earlier on, it would have eased her financial stress. She would have had a much longer time period to save, reducing her required annual savings and making it more manageable with her current salary. The concept of compound interest would have also been advantageous, where her savings would accumulate interest over time and the interest, in turn, would itself earn interest.

Developing a long-term investing strategy begins with setting clear financial goals and laying out a time frame for achieving them. You should also regularly contribute to your retirement savings and consider various investment options. Diversify your investment portfolio with a mix of high and low-risk investments to balance potential growth with stability. Always review and adjust your plan as needed over time.

Learn more about Retirement Planning here:

brainly.com/question/31284848

#SPJ5

Answer:

An effective strategy to retirement includes setting goals, being aware of timing knowing when and how long it will take to save. Also, taking advantage of retirement savings options such as 401(k), IRA, or SEP plans, as well as understanding the impact of taxation and tax benefits. Lastly, staying on top of it all when you actually get there, and monitoring your progress every step of the way making adjustments when needed.

Explanation:

Other Questions

Orlando invested $16,000 in an eight-year CD bearing 6.5% interest, but needed to withdraw $3,500 after five years. If the CD’s penalty for early withdrawal was one year’s worth of interest on the amount withdrawn, when the CD reached maturity, how much less money did Orlando earn total than if he had not made his early withdrawal?

Gullett Corporation had $30,000 of raw materials on hand on November 1. During the month, the Corporation purchased an additional $79,000 of raw materials. The journal entry to record the purchase of raw materials would include a: Multiple Choice debit to Raw Materials of $109,000 credit to Raw Materials of $79,000 debit to Raw Materials of $79,000 credit to Raw Materials of $109,000

The National Asphalt Pavement Association (NAPA) announced that Staker and Parson Companies won its Community Involvement Award for "Rocks Build Our World", an outreach program for elementary schools. The Rocks Build Our World program includes both group tours of the company's corporate office facility and classroom visits targeted to fourth graders. The classroom visits start with some basic information on geology, mining methods and the uses of minerals in every day life. This is an example of:_________A.Press agentryB.Sales promotionC.Community involvementD.Societal advertisingE.Advocacy advertising

Brad has a steady job, solid income, and plans to live in a nearby city for the long term. He is looking to purchase both a car and a place to live, and he is very interested in building up equity and credit to add to his assets.Which of the following illustrates the most economically sound choice for Brad? A.buying both a car and a home B.leasing both a car and home C.buying a car and leasing a home D.leasing a car and buying a home