Juan, Not a Dealer in Real Property, Sold Land That

question 36

Multiple Choice

Juan, not a dealer in real property, sold land that he owned.His adjusted basis in the land was $500,000 and it was encumbered by a mortgage for $200,000.The terms of the sale required the buyer to pay Juan $100,000 on the date of the sale.The buyer assumed Juan's mortgage and gave Juan a note for $600,000 (plus interest at the Federal rate) due in the following year.What is the gross profit percentage (gain ¸ contract price) ?

• A)300/900 = 33.3%.
• B)400/700 = 57.14%.
• C)400/600 = 66.67%.
• D)500/900 = 55.55%.
• E)None of the above.

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Definitions:

Monitoring

Monitoring refers to the regular observation and recording of activities taking place in a project or system over time, often for the purpose of ensuring compliance with standards or the progress towards objectives.

Needs And Wants

Basic requirements for survival (needs) contrasted with desires that can be fulfilled through purchasing goods and services (wants).

Managerial Accounting

Managerial accounting involves the processes of identifying, analyzing, recording, and presenting financial information that can be used internally by managers for planning, decision-making, and operational control.

Financial Accounting

The field of accounting focused on the summary, analysis, and reporting of financial transactions relating to a business, following standardized guidelines.