Investment-Related Exclusions (LO, 6) Enter in the entry field the amount of inc
ID: 2421039 • Letter: I
Question
Investment-Related Exclusions (LO, 6) Enter in the entry field the amount of income Marvin must recognize for each scenario that follows. If an amount is zero, enter "0". Marvin owes Central State Bank $80,000. The bank agrees to reduce the debt to $60,000. Prior to the debt reduction, Marvin's assets total $350,000 and his liabilities are $330,000. Marvin owes Central State Bank $80,000. The bank agrees to reduce the debt to $60,000. Prior to the debt reduction, Marvin's assets total $350,000 and his liabilities are $400,000. Marvin owes Central State Bank $80,000 in the form of a mortgage on his principal residence. The bank agrees to reduce the debt to $60,000. Prior to the debt reduction, Marvin's assets total $350,000 and his liabilities are $400,000.Explanation / Answer
Answer :
Case A : Amount of income = 40,000
marvin owes central state bank $80,000
bank agrees to reduce debt to $ 60,000
prior to reduction marvin's assets 350000 total assets and total liabelity330000
Amount of reduction in loan 20,000 (80,000-60,000) Add+ 20000 (Assets less liabelity= 350000-33000)
=20000+20000
=40,000
Case B : Amount of income = 20,000
marvin owes central state bank $80,000
bank agrees to reduce debt to $ 60,000
prior to reduction marvin's assets 350000 total assets and total liabelity300
Amount of reduction in loan 20,000 (80,000-60,000)
=Income20,000
Case C : Amount of income =
0
marvin owes central state bank $80,000
bank agrees to reduce debt to $ 60,000
prior to reduction marvin's assets 350000 total assets and total liabelity300
Amount of reduction in loan 20,000 (80,000-60,000)less(50,000) (Assets less liabelity= 350000-40000)
= 20000 -50000
=Income =0
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.