Week 2 Question - 1 Question 4-25 Billy Dent, as the owner...

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1 Question 4-25 Billy Dent, as the owner of an apartment building, receives and makes the following payments during 2011: Received in January 2011 rent that was due in December 2010…. . $5000 - Received in December 2011 rent not due until January 2012…. . $4000 - Security deposit which is to be refunded when tenant vacates the apartment…. $500 Answer: $5000 + $4000 = $9000 because rent is taxable when it is received – Security deposit that is refundable is not taxable. Question 4-32 Arnold and Barbara Cane were divorced in June 2011. Pursuant to the divorce decree, Arnold is obliged to perform as follows: a) Transfer title of their personal home to Barbara. They purchased the house in 1998 and their basis today is $400,000. The fair market value of the house is $500,000. The house is subject to a 25-year, $250,000 mortgage. b) Arnold is to continue making payments on the house until it is fully paid off. In 2011, Arnold made payments totaling $18,000. c) Arnold is to make $3,000 per month payments to Barbara. Of this amount one-half is for child support. The divorce decree further states that alimony is to cease upon the death of the wife. In 2011, he made six payments.
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This note was uploaded on 03/18/2012 for the course ACCT 550 taught by Professor Cavendar during the Spring '10 term at Keller Graduate School of Management.

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Week 2 Question - 1 Question 4-25 Billy Dent, as the owner...

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