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For federal income tax purposes, some sellers/buyers ("broker/dealers") report purchases and sales of real estate as ordinary income, not capital gains. The theory is that you're not "just" an investor; your ordinary business is buying and selling real estate like any other commodity. Builders fall into that category in particular.
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What effect does the purchase of treasury stock have on net income?
Purchase of treasury stock has no effect on the net income of a business. The purchase may affect cash flow of the business. No profit or loss is claimed when shares are re-issued at above or below cost.
Does year end cash balances count against net income?
Cash balances do not affect net income. The year end cash balance will be reflected on the Balance Sheet and Statement of Cash Flows.
What method of costing will yield the largest net income if the purchase price is steadily falling?
LIFO
Which section of the income statement does not report net of income taxes or net of income?
Trading account statement does not report net of income taxes or net of income.
When is income summary a net loss?
when net income is zero
Incidental costs incurred in the purchase of land that are charged to Land Improvements will affect net income at some future time?
That is true.
What effect does the purchase of treasury stock have on net income?
Purchase of treasury stock has no effect on the net income of a business. The purchase may affect cash flow of the business. No profit or loss is claimed when shares are re-issued at above or below cost.
Does year end cash balances count against net income?
Cash balances do not affect net income. The year end cash balance will be reflected on the Balance Sheet and Statement of Cash Flows.
Formula for net income?
Net income percentage = Net income / Revenue
What method of costing will yield the largest net income if the purchase price is steadily falling?
LIFO
Which section of the income statement does not report net of income taxes or net of income?
Trading account statement does not report net of income taxes or net of income.
Formula for net income percentage?
Net income percentage = Net income / Revenue
Where do gain of sale of land go on an income statement?
Loss on sale of land is added back to net income in operating activities and sale of land is shown under investing activity as a reduction in amount.
How is gross income different from net income?
net income is gross income less expenses
What is net income if revenue is 45000 expenses are 25000 purchased assets are 5000 and owner drawings are 3000?
Formula for net income is as follows: Net income = sales - expenses net income = 45000 - 25000 net income = 20000
When is income summary a net loss?
when net income is zero
If expense is overstated will net income be lower?
Net Income = Sales - ExpensesSo as many expanses net income will be lower.
