Jasmine sold land for $250,000 in 2016.The land had a basis of $118,000 and she incurred selling expenses of $10,000.Jasmine received $50,000 cash down in 2016 and will receive five additional annual payments of $40,000 each.What is Jasmine's gross profit percentage on the sale?

Question

Quizplus · Accepted Answer

- To calculate the gross profit percentage, we need to first calculate the gross profit, which is the selling price minus the cost of goods sold (which includes the basis and selling expenses).
- Selling price = $250,000
- Cost of goods sold = $118,000 + $10,000 = $128,000
- Gross profit = $250,000 - $128,000 = $122,000
- Gross profit percentage = (gross profit / selling price) x 100%
- Gross profit percentage = ($122,000 / $250,000) x 100% = 48.8%

Jasmine Sold Land for $250,000 in 2016