FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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On July 1, Year 1, a nondealer, calendar year taxpayer sells an item of personal property for $50,000 .
His adjusted basis in the property was $30,000.
He receives cash of $10,000 at Closing (Year 1), and $40,000, payable in eight annual installments of $5,000 (beginning Year 2). Imputed interest is not a factor.
What was his gross profit and his gross profit percentage?
a. 10,000 and 20%
b. 10,000 and 40%
c. 20,000 and 20%
d. 20,000 and 40%
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