1.John invests in shares of Dell Computers. He intends to hold these shares for an extended...

1.John invests in shares of Dell Computers. He intends to hold these shares for an extended period of time and they are the only shares that he owns. He earns $6,000 in dividends from the shares in 2012.What kind of income are the dividends?

a. business income b. property income

2.Patrick is a serial investor and owns 4 different apartment complexes each with 20 units each. Each complex has its own building manager and repairman. He has a bookkeeper who does work for all the four buildings.What kind of income are the rents that Patrick will receive?

a.business income b.property income

Expert Solution

1. Property income

This is the profit or profits earned by owning a capital equipment like receiving a rent or interest/dividend received on financial assets. He earned this income just by possessing the shares so it is a propert income.

2. Business income

Patric, as we can see from the statement, is in the business of renting out the apartments, he has a manager to manage this business as well so our is a business income. Yes, you may thing this income is being earned by owning a property but he is an active owner of the property and actually have employees ( manager and repairmen) to run his business.

Rahul Sunny answered 2 years ago

1. John buys shares of stock in Acme Corp. on January 1, 2018 for $50. He...

1. John buys shares of stock in Acme Corp. on January 1, 2018 for $50. He gifts the stock to Mary on July 1, 2018 when the stock has a fair market value (fmv) of $60. Mary sells the stock on September 1 , 2018 for $80. a. What is the gain /loss recognized by John? ______________ What is the character of the gain/loss? _____________ b. What is the gain /loss recognized by Mary? ______________ What...

1. Watt Co. purchased $300,000 of bonds for $315,000. If Watt intends to hold the securities...

1. Watt Co. purchased $300,000 of bonds for $315,000. If Watt intends to hold the securities to maturity, the entry to record the purchase of the investment includes A credit to Investments in bonds at $300,000. A credit to Discount on Investments of $15,000. A credit to Cash at $300,000. A credit to Cash at $315,000. 2. When a product or service is delivered for which a customer advance has been previously received, the appropriate journal entry includes: A. A...

John is the owner of medium-sized company that assembles personal computers in Ghana. He purchase most...

John is the owner of medium-sized company that assembles personal computers in Ghana. He purchase most of the components for the company such as random access memory (RAM) on a competitive market. In order to maximise profit in the short run, he employed an economist to estimate the demand curve, which he was able to use to derive the marginal revenue (MR) from his product as: ??=70−16?. The economist also derived the marginal cost function (MC) as: ??=6?−51. (i) Find...

1 (a) Describe the demand for Dell Computers? 1 (b) What variables affecting Dell's product demand?...

1 (a) Describe the demand for Dell Computers? 1 (b) What variables affecting Dell's product demand? 1(c) Refer to part 1 (b), What variables changed significantly in 2020? This is an essay type question. It doesn't require mathematical calculations. It looks at companies assigned. Then 5-7 lines or basic factors of demand. Then what factors of demand as income, customer preferences etc changed in 2020.

John holds 100 shares of stock with a total basis of $1000. He receives a 25%...

John holds 100 shares of stock with a total basis of $1000. He receives a 25% stock dividend at the end of year 1. In year two, he sales 30 of his shares when the stock price is $15.00 per share. Please calculate his gain in year two.

1. Dell Computers would like to borrow pounds, and Virgin Airlines wants to borrow dollars. Because...

1. Dell Computers would like to borrow pounds, and Virgin Airlines wants to borrow dollars. Because Dell is better known in the United States, it can borrow on its own dollars at 7 percent and pounds at 9 percent, whereas Virgin can on its own borrow dollars at 8 percent and pounds at 8.5% a. Suppose Dell wants to borrow £10 million for two years, Virgin wants to borrow $16 million for two years, and the current ($/£) exchange rate...

4. John buys shares of stock in Acme Corp. on January 1, 2018 for $50. John...

4. John buys shares of stock in Acme Corp. on January 1, 2018 for $50. John dies July 1, 2018 when the stock has a fmv of $60. Mary inherits the stock from John’s estate. Mary sells the stock on September 1, 2018 for $80. a. What is the gain /loss recognized by John’s estate? ______________ What is the character of the gain/loss? _____________ b. What is the gain /loss recognized by Mary? ______________ What...

1. Venture capitalist X invests in 20% (1,000,000 shares of common stock) of a company for...

1. Venture capitalist X invests in 20% (1,000,000 shares of common stock) of a company for $10 million dollars and in the next round of financing the company issues an additional 5 million shares of common stock to venture capitalist Z for $5 million dollars. The stake of Venture capitalist X in the company is reduced to 10%. This is an example of dilution. (True or False) 2. One way for individuals who are not accredited investors to gain exposure...

Arnold Vimka is a venture capitalist facing two alternative investment opportunities. He intends to invest $1...

Arnold Vimka is a venture capitalist facing two alternative investment opportunities. He intends to invest $1 million in a start-up firm. He is nervous, however, about future economic volatility. He asks you to analyze the following financial data for the past year’s operations of the two firms he is considering and give him some business advice. Company Name Larson Benson Variable cost per unit (a) $ 21.00 $ 10.50 Sales revenue (8,900 units × $30.00) $ 267,000 $ 267,000 Variable...

Arnold Vimka is a venture capitalist facing two alternative investment opportunities. He intends to invest $1...

Arnold Vimka is a venture capitalist facing two alternative investment opportunities. He intends to invest $1 million in a start-up firm. He is nervous, however, about future economic volatility. He asks you to analyze the following financial data for the past year’s operations of the two firms he is considering and give him some business advice. Company Name Larson Benson Variable cost per unit (a) $ 18.00 $ 9.00 Sales revenue (9,000 units × $31.00) $ 279,000 $ 279,000 Variable...

Question

1.John invests in shares of Dell Computers. He intends to hold these shares for an extended...

Solutions

Expert Solution

Related Solutions

1. John buys shares of stock in Acme Corp. on January 1, 2018 for $50. He...

1. Watt Co. purchased $300,000 of bonds for $315,000. If Watt intends to hold the securities...

John is the owner of medium-sized company that assembles personal computers in Ghana. He purchase most...

1 (a) Describe the demand for Dell Computers? 1 (b) What variables affecting Dell's product demand?...

John holds 100 shares of stock with a total basis of $1000. He receives a 25%...

1. Dell Computers would like to borrow pounds, and Virgin Airlines wants to borrow dollars. Because...

4. John buys shares of stock in Acme Corp. on January 1, 2018 for $50. John...

1. Venture capitalist X invests in 20% (1,000,000 shares of common stock) of a company for...

Arnold Vimka is a venture capitalist facing two alternative investment opportunities. He intends to invest $1...

Arnold Vimka is a venture capitalist facing two alternative investment opportunities. He intends to invest $1...