Final answer:
The cost of the asset at the end of 2015 was $1,500.
Step-by-step explanation:
The cost of the asset at the end of 2015 was $1,500.
To calculate the cost of the asset at the end of 2015, we consider the purchase price and the change in value. The asset was purchased for $1,000 and its value increased to $1,500 by the end of 2015. This increase in value is not considered a taxable gain until the asset is sold.
Therefore, the cost of the asset at the end of 2015 is $1,500.
A sole proprietorship is a type of business structure where a single individual owns and operates the business. It is the simplest form of business organization and is not a separate legal entity from its owner. Here are some key characteristics of a sole proprietorship:
Ownership: Sole proprietorships are owned and operated by a single individual, known as the sole proprietor.
Liability: The owner has unlimited personal liability for the business's debts and obligations. This means that personal assets can be used to satisfy business debts.
Taxation: Business income is reported on the owner's tax return. The income is taxed at the individual income tax rates.
Decision-Making: The owner has complete control and makes all decisions related to the business.
Flexibility: Sole proprietorships are easy to set up and have minimal formalities. The owner has the flexibility to make decisions quickly.
Profit and Loss: The owner receives all profits but also bears all losses.
Continuity: A sole proprietorship is closely tied to the life of the sole proprietor. If the owner retires, sells, or passes away, the business may cease to exist unless it is transferred to someone else.
Capital: The sole proprietor provides the capital for the business from personal funds or loans.
It's important to note that while a sole proprietorship is easy to establish and provides a high degree of control for the owner, unlimited personal liability is a significant drawback. This means that the owner's assets are at risk in the event of business debts or legal liabilities. Many small businesses start as sole proprietorships and may later transition to more complex structures as they grow.