In 2012, Joe Purchased Land for $73,500 for Use in His

question 24

Multiple Choice

In 2012, Joe purchased land for $73,500 for use in his business. He sold it in 2015 for $100,000. What is the gain on the sale before any netting?

• A) $26,500 Section 1231 gain.
• B) $26,500 Section 1245 gain.
• C) $26,500 Section 1250 gain.
• D)$26,500 ordinary income.

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Definitions:

Times Interest Earned

A financial ratio that measures a company's ability to meet its debt obligations by comparing its earnings before interest and taxes (EBIT) to its interest expenses.

Gross Margin Percentage

The portion of sales revenue that exceeds the cost of goods sold, expressed as a percentage, indicating the financial health of product sales.

Net Profit Margin Percentage

A financial metric that shows the percentage of revenue remaining after all operating expenses, interest, taxes, and preferred stock dividends have been deducted from total sales.

Contribution Margin

The amount remaining from sales revenues after all variable expenses have been deducted.