Question
On Year 1 ABC Company sell equipment to XYZ Company for $415,000 in an installment sale. ABC Company has a basis in the equipment of
On Year 1 ABC Company sell equipment to XYZ Company for $415,000 in an installment sale. ABC Company has a basis in the equipment of $250,000. In year 1 ABC company will received three payments totaling $300,000 and in year 2 the final payment totaling $115,000.
- What is the gross profit on the sale?
- What is the gross profit percentage?
- How much taxable income is recognized in year 1?
- How much taxable income is recognized in year 2?
- If the equipment was sold for a price of $100,000 rather than $400,000, how much loss would be recognized in year 2?
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The Organisational Change Audit
Authors: Ralph Houston
1st Edition
1907766014, 978-1907766015
