Five years ago, Firm SJ purchased land for $102,000 with $10,000 of its own funds and $92,000 borrowed from a commercial bank The bank holds a recourse mortgage on the land For each of the following independent transactions, compute SJs positive or negative cash flow Assume that SJ is solvent, any recognized loss is fully deductible, and SJs marginal tax rate is 21 percent Required SJ sells the land for $35,000 cash and the buyers assumption of the $80,000 principal balance of the mortgage SJ sells the land for $115,000 cash and pays off the $80,000 principal balance of the mortgage SJ sells the land for $83,000 cash and pays off the $80,000 principal balance of the mortgage SJ defaults on the $80,000 mortgage The bank forecloses and sells the land at public auction for $64,200 The bank notifies SJ that it will not pursue collection of the $15,800 remaining debt SJ defaults on the $80,000 mortgage The bank forecloses and sells the land at public auction for $64,200 The bank requires SJ to pay off the $15,800 remaining debt (For all requirements, Negative amounts should be indicated by a minus sign )

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Five years ago, Firm SJ purchased land for $102,000 with $10,000 of its own funds and $92,000 borrowed from a commercial bank. The bank holds

Five years ago, Firm SJ purchased land for $102,000 with $10,000 of its own funds and $92,000 borrowed from a commercial bank. The bank holds a recourse mortgage on the land. For each of the following independent transactions, compute SJs positive or negative cash flow. Assume that SJ is solvent, any recognized loss is fully deductible, and SJs marginal tax rate is 21 percent.

Required:

SJ sells the land for $35,000 cash and the buyers assumption of the $80,000 principal balance of the mortgage.
SJ sells the land for $115,000 cash and pays off the $80,000 principal balance of the mortgage.
SJ sells the land for $83,000 cash and pays off the $80,000 principal balance of the mortgage.
SJ defaults on the $80,000 mortgage. The bank forecloses and sells the land at public auction for $64,200. The bank notifies SJ that it will not pursue collection of the $15,800 remaining debt.
SJ defaults on the $80,000 mortgage. The bank forecloses and sells the land at public auction for $64,200. The bank requires SJ to pay off the $15,800 remaining debt.

(For all requirements, Negative amounts should be indicated by a minus sign.)