In Each of the Following Cases,determine the Amount of Realized

question 84

Essay

In each of the following cases,determine the amount of realized gain or loss and the recognized gain or loss:
a.Silvia sells her house for $100,000 and she pays $8,000 in commissions on the sale.She paid $110,000 for the house 2 years earlier.

b.In July 2012,Carmen,who is single,is transferred to Dallas.She had purchased a new home in June 2013 for $130,000.Carmen sells the house for $165,000 and pays a commission of $10,000 on the sale.

c.Conrad is single and sells his principal residence for $350,000.He pays selling expenses of $20,000.Conrad purchased the house for $65,000 in 1986.
c.Conrad is single and sells his principal residence for $350,000. He pays selling expenses of $20,000. Conrad purchased the house for $65,000 in 1986.

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Definitions:

Zero Marginal Cost

Zero marginal cost describes a situation where producing one additional unit of a good or service does not increase the total cost of production.

Fixed Cost

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance, which are incurred regardless of the quantity produced.

Patent

A legal right granted by a government to an inventor, giving the holder exclusive rights to use, sell, and manufacture the invention for a certain period of time.

Zero Marginal Cost

A situation where producing one additional unit of a good or service does not increase the total cost of production.