Question

Abby sold a parcel of land for $18,000. She paid a real estate agent a commission of $1,200 for assisting with the sale. Abby had purchased the land several years earlier for $14,500. What is the gain on the sale of the land?

a. Gain of $3,500
b. Gain of $16,800
c. Gain of $18,000
d. Gain of $2,300

Answer 1

Answer: D - Gain of $2,300

Explanation: Abby bought the land for $14,500 several years ago.

She sold the land for $18,000 less commission paid to the agent at $1200.

Abby from the above statement made a gain and its calculated thus:

Sale of land =$18,000

Less:

Cost of the land =$14,500

Commission = $1,200

Gain = $18,000-$14,500-$1,200= $2,300