Majoo Inherited Property from His Uncle on August 15, 2015

question 6

Essay

Majoo inherited property from his uncle on August 15, 2015. His uncle purchased the property on December 10, 2013 for $100,000. At the date of his death, the property's FMV was $102,000. Majoo sold the property on September 30, 2015 for $105,000.
a. What is the gain on the sale of the property?
b. What is the nature of the gain?

Recognize the normal balances of various accounts related to sales and returns.

Apply accounting principles to transactions involving sales discounts, sales returns, and sales allowances.

Identify and categorize accounts as asset, liability, or equity and their normal balances.

Analyze transactions involving sales tax and determine the correct journal entries.