Chapter 3 Homework[1]

Chapter 3 Homework[1] - 1. Dick owns a house that he rents...

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Unformatted text preview: 1. Dick owns a house that he rents to college students. Dick receives $750 per month rent and incurs the following expenses during the year: Real estate taxes $ 1,250 Mortgage interest 1,500 Insurance 375 Repairs 562 Dick purchased the house in 1980 for $48,000, excluding land costs, and depreciates it on a straight-line basis with no salvage value and a useful life of 30 years. Calculate Dicks net rental income for the year, assuming the house was rented for a full 12 months. Rental income: $750 * 12 = $9,000 annually Expenses: 1250+1500+375+562 = 3687 total in expenses Net rental income: Rental Income ($750 x 12) $ 9 , Less expenses: Real Estate Tax 1,250 Mortgage Interest 1,500 Insurance 375 General repairs 562 Depreciation: House ($48,000/30) 1,600 Total expenses 5 , 2 8 7 Net rental income $ 3 , 7 1 3 4. Clifford Johnson has a limited partnership investment and a rental condominium. Clifford actively manages the rental condominium. During 2009, his share of the loss from the limited partnership was manages the rental condominium....
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Chapter 3 Homework[1] - 1. Dick owns a house that he rents...

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