Question
In May 2016, Kevin McElwainee sells property with an adjusted basis of $75,000 for $250,000 to Josh Amico. Josh pays Kevin $12,500 cash at closing
In May 2016, Kevin McElwainee sells property with an adjusted basis of $75,000 for $250,000 to Josh Amico. Josh pays Kevin $12,500 cash at closing and the remaining to be paid in 5 annual installments of $47,500 beginning in May 2017. Ignore the impact of interest for this exercise.
- What is Kevins gross profit or loss on the sale? (b) what is Kevins gross profit percentage? (c) How much profit will Kevin recognize in 2016? (d) How much profit will he recognize in the later years?
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Principles Of Financial Accounting
Authors: Kermit Larson, John Wild
20th Edition
77338235, 978-0077619442
