Discuss whether Sean can take $150,000 loss for a business bad debt or for a worthless security.
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Sean is in the business of buying and selling stocks and bonds. He has a bond of Green Corporation for which he paid $200,000. The bond is currently worth only $50,000. Discuss whether Sean can take $150,000 loss for a business
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- Sean is the business of buying and selling stocks and bonds. He has a bond of Green Corporation for which he paid $200,000. The bond is currently worth only $50,000. Discuss wether Sean can take a $150,000 loss for a business bad debt or for a worthless security.Lucy buys a $4,000 piano (transaction 4). The purchase is funded by a $1,200 bank loan (transaction 1), the redemption of a $2,600 term deposit (transaction 2) and the sale of $200 worth of corporate bonds (transaction 3), which were bought in the past for $250. The piano is an asset _ Type Y if true, N if incorrect. The term deposit is an asset _ Type Y if true, N if incorrect. The loan is an asset _ Type Y if true, N if incorrect. In net, the balance sheet size changes by _ Type a sign + or - followed by one number with no dollar sign. Type 0 (the number zero) if there is no change. The stock of bonds changes by _ Type a sign + or - followed by one number with no dollar sign. Type 0 (the number zero) if there is no change. The income from the sale of the bonds is _ Type a sign + or - followed by one number with no dollar sign. Type 0 (the number zero) if there is no change. In net, the deposits change by _ Type a sign + or - followed by one number with no dollar sign. Type…Fred’s net worth is shown in the table below. Assets are positive numbers and liabilities are negative numbers. If Fred’s net worth is $74,000 how much does he owe in credit card debt?
- Anthony has a Visa card with a $33,500 limit, a MasterCard with a $22,000 limit, a Chase Card with a limit of $17,000 and a Discover card with a $37,500 limit. Anthony has accumulated the following balances on his credit cards: Visa card: $19,299, MasterCard: $19,952 Chase card: $2,000 Discover card: $3,886 What is Anthony’s debt-to-credit ratio?Edward gives a check to Fund Investments to buy 100 shares of stock in GR8 Tech Corporation. The price of the shares is constantly fluctuating. Fund Investments asks Edward to leave the amount of the check blank and allow it to fill in the price when making the purchase. Edward agrees. Fund Investments buys the stock when the price is $4,000, but fills in the check for $5,000. The check is negotiated as payment for a $5,000 debt to Hasty Accounting Services, which takes the check in good faith and without notice of Fund Investments’ act. Hasty later learns that Fund Investments was not authorized to fill in the check for $1,000 over the price. Is Hasty an HDC? If so, for how much?Steinar loaned a friend $9,500 to buy some stock 3 years ago. In the current year the debt became worthless. a. How much is Steinar's deduction for the bad debt for this year? (Assume he has no other capital gains or losses.) 4,750 X as a nonbusiness ✓ bad debt. Feedback ▼ Check My Work Bad debts fall into one of two categories, business bad debts or nonbusiness bad debts. Debts that arise from the taxpayer's trade or busin are classified as business bad debts, while all other debts are considered nonbusiness bad debts. The distinction between the two types of debts is important, since business bad debts are ordinary deductions and nonbusiness bad debts are short-term capital losses. b. What can Steinar do with the deduction not used this year? The remaining $ 0x can be carried forward as a short-term capital loss and deducted in future years, subject to an annual limitation
- 1.Three years ago, Morris loaned Alma $5,000 (Year 1) with the understanding that the loan would be repaid in two years. Last year (Year 3) Alma filed for bankruptcy, and Morris learned that he would receive $0.10 on the dollar. In the current year, Year 4, the final settlement was made, and Morris received $300. Assuming the loan is a nonbusiness bad debt, how should Morris account for the loan? a. $4,700 ordinary loss in the current year. b. $3,000 ordinary loss last year and $1,700 ordinary loss in the current year c. $4,700 short-term capital loss in the current year. d. $3,000 short-term capital loss last year and $1,700 short-term capital loss in the current year.a. Josh borrowed $87,000 from First State Bank using his business assets as collateral. He used the money to buy City of Blanksville bonds. Over the course of a year, Josh paid interest of $13,300 on the borrowed funds, but he received $12,000 of interest on the bonds. Deductible amountJohn borrows $700 from a bank. He promises to pay $749 in 1 year's time. How much interest is john being charged by the bank?
- Vini was owed RM200 by a debtor, Kelvin. However, Kelvin was declared bankrupt. Vini later received information that meant that he would receive a payment of 45% of any outstanding debts owed to him by Kelvin. How should Vini record the debt being written off in his accounts? A. Dr Profit & Loss RM90, Cr Bank RM90 B. Dr Ali RM110, Cr Bad debts RM110 C. Dr Bad debts RM110, Cr Ali RM110 D. Dr Bank RM90, Cr Profit & Loss RM90Robert Sampson owns a townhouse valued at $140,000 and still has an unpaid mortgage of $110,000. In addition to his mortgage, he has the following liabilities: Visa MasterCard Discover card Education loan Personal bank loan Auto loan Total $ 565 480 395 920 800 4,250 $7,410 Robert's net worth (not including his home) is about $21,000. This equity is in mutual funds, an automobile, a coin collection, furniture, and other personal property. a. What is Robert's debt-to-equity ratio? (Round your answer to 2 decimal places.) Debt-to-equity ratio b. Has he reached the upper limit of debt obligations? Yes NoXia and John have joint accounts at Downtown Bank that is insured by the FDIC. They have $220,000 in their checking account, $350,000 in regular savings account, and $150,000 in an investment account. Unfortunately, Downtown Bank went bankrupt. How much would Xia and John recover from their accounts? Show work.