Bob Owns a Rental Property That He Bought Several Years

question 87

Multiple Choice

Bob owns a rental property that he bought several years ago for $260,000.He has taken depreciation on the house of $37,000 since buying it.He sells it in 2013 for $290,000.His selling expenses were $12,000 for the year.What was Bob's realized gain on the sale?

• A)$30,000
• B)$55,000
• C)$67,000
• D)$18,000
• E)None of the above

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Definitions:

Comparative Balance Sheet

A financial statement that provides a snapshot of a company's assets, liabilities, and equity at two or more points in time for comparison.

Cash Dividends

Payments made by a corporation to its shareholders from its profits in the form of cash.

Prepaid Expenses

Costs paid for in advance of receiving the benefit of the service or product, such as insurance premiums or rent, which are recorded as assets until used.

Income Taxes Payable

The amount of income taxes a company or individual owes to the government, which has not yet been paid.