Question

Potomac Corporation wants to sell a warehouse that it has used in its business for 10 years. Potomac is asking $450,000 for the property. The warehouse is subject to a mortgage of $125,000. If Potomac accepts Wyden Inc.’s offer to give Potomac $325,000 in cash and assume full responsibility for the mortgage on the property, what amount does Potomac realize on the sale

Answer 1

Potomac Corporation will realize $450,000 with the sale of the warehouse

Step-by-step explanation:

To determine how much money Potomac Corporation realized with the sale of the warehouse we can use the following equation:

money realized = sales price of warehouse + mortgage assumed by buyer

money realized = $325,000 + $125,000 = $450,000