Answer:
A. $6000 ordinary income on sale of a creative asset by the creator of the asset.
B. $4000 ordinary income on the sale of inventory.
C. $35000 capital gain on sale of a capital asset. (which is a non depreciable business personality).
Explanation:
The taxpayer sold a painting to Reller Gallery for $6000. So, the tax payer amount and the character of tax payer gain or loss is as follows:
A. $6000 amount realized minus zero basis is equal to $6000 ordinary income on sale of a creative asset by the creator of the asset.
Reller Gallery sold the painting purchased by from Kara to a regular customer, Lollard Inc. for $10000. So, the tax payer amount and the character of tax payer gain or loss is as follows:
B. $10000 amount realized minus $6000 cost basis is equal to $4000 ordinary income on the sale of inventory.
Lollard Inc., the tax payer, was the regular customer that purchased the painting from the Reller Gallery. Lollard showed the painting in the lobby of its corporate headquarters until it sold "Shenandoah Skies" painting to a collector from Dallas. Where the collector paid $45,000 for the painting. So, the tax payer amount and the character of tax payer gain or loss is as follows:
C. $45000 amount realized minus $10000 cost basis is equal to $35000 capital gain on sale of a capital asset. (which is a non depreciable business personality).
Answer: The constant growth model can be used if a stock's expected constant growth rate is less than its required return.
Explanation:
The Constant Growth Model is a stock valuation method.
It assumes that a company's dividends are increasing at a constant growth rate indefinitely.
Formula: Current price = (Next dividend the company is to pay) ÷ (required rate of return for the company - expected growth rate in the dividend.
When expected constant < required return, then the constant growth model can be used.
Hence, the statement is true about the constant growth model :
The constant growth model can be used if a stock's expected constant growth rate is less than its required return.
Answer:
Steady Company's cost of equity is estimated to be 7.342%
Explanation:
The cost of equity is the return that is required by the holders of common stock in the company.
<em>Cost of Equity = Return on Risk free Securities + Beta × Risk Premium</em>
= 6.1 % + 0.18 × 6.9 %
= 7.342%
Therefore, Steady Company's cost of equity is estimated to be 7.342%.
The Cash Collection from the Credit sales in the Month of December is $130,300.
Credit (from the Latin verb credit score, which means "one believes") is the agree with which permits one party to offer money or resources to any other celebration in which the second birthday celebration does not reimburse the primary birthday party at once (thereby producing a debt), however, guarantees both to repay or go back those resources (or different substances of identical price) at a later date. In different words, credit is a method of making reciprocity formal, legally enforceable, and extensible to a massive organization of unrelated humans.
The assets provided may be financial (e.g., granting a loan), or they'll encompass items or offerings (e.g., client credit score). credit score encompasses any shape of the deferred fee. a credit score is extended by means of a creditor, also called a lender, to a debtor, additionally called a borrower.
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